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High Court of Australia Transcripts |
Last Updated: 29 August 2005
IN THE HIGH COURT OF AUSTRALIA
Office of the
Registry
Sydney No S359 of 2005
B e t w e e n -
GREG COMBET
First Plaintiff
NICOLA ROXON MP
Second Plaintiff
and
COMMONWEALTH OF AUSTRALIA
First Defendant
THE HONOURABLE KEVIN ANDREWS MP
Second Defendant
SENATOR THE HONOURABLE NICHOLAS MINCHIN
Third Defendant
GLEESON CJ
McHUGH J
GUMMOW
J
KIRBY J
HAYNE J
CALLINAN J
HEYDON
J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON MONDAY, 29 AUGUST 2005, AT 10.17 AM
Copyright in the High Court of Australia
__________________
MR S.J. GAGELER, SC: If the Court pleases, I appear with MR J.K. KIRK for the plaintiffs. (instructed by Maurice Blackburn Cashman)
MR D.M.J. BENNETT, QC, Solicitor-General of the Commonwealth of Australia: If your Honours please, I appear with my learned friends, MR S.B. LLOYD and MS K.J. GRAHAM, for the defendants. (instructed by Australian Government Solicitor)
MR R.J. MEADOWS, QC, Solicitor-General for the State of Western Australia: May it please the Court, I appear with my learned friend, MS J.C. PRITCHARD, for the Attorney-General for Western Australia intervening. (instructed by Crown Solicitor’s Office Western Australia)
GLEESON CJ: Mr Gageler.
MR GAGELER: Your Honours, we propose to deal with three matters of context before turning to the relevant provisions of the Appropriation Act (No 1) and the portfolio budget statement.
KIRBY J: Will you show us that Act at an early stage. I do not think I have ever looked at an Appropriation Act before.
MR GAGELER: If your Honour can trust me, it is better if I do not and if I give your Honour the context before I come to that Act. It will mean I do it once rather than twice.
KIRBY J: I trust you then, Mr Gageler.
MR GAGELER: Yes, your Honour, thank you.
KIRBY J: So far.
MR GAGELER: I hope I continue to warrant your Honour’s trust. The first matter of context is the constitutional context. The second is the statutory context created by two Acts. One is the Charter of Budget Honesty Act 1998; the other is the Financial Management and Accountability Act 1997. The third matter of context is Commonwealth parliamentary practice. Going first to the Constitution, the centrally relevant provisions are of course - - -
KIRBY J: By Commonwealth practice do
you mean the practice of the
Federal Parliament or practice throughout the
Commonwealth of Nations?
MR GAGELER: I meant Commonwealth parliamentary practice, that is, the practice of the Federal Commonwealth Parliament.
KIRBY J: It appears in section 1 or 2 of the Constitution as to the Federal Parliament.
MR GAGELER: Yes. I
will note that, your Honour. Section 81, on one view creates, and on
another view mandates the existence of the consolidated revenue fund which is to
be appropriated for
the purposes of the Commonwealth in the manner imposed by
this Constitution. Section 83 then, in language borrowed from
Article 1, section 9, clause 7 of the United States
Constitution provides that:
No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law -
the reference to an “appropriation by law” being either to an act of the Federal Parliament under section 81 or to an appropriation effected by another provision of the Constitution itself.
GUMMOW J: It is saying that a resolution is not enough, is it not?
MR GAGELER: It is saying a resolution is certainly not enough.
McHUGH J: Which was the practice in the Commons?
MR GAGELER: Yes, that is right. To recognise the
significance of the direct prohibition that one finds in section 83 one has
to note, and not simply in passing, section 64 of the Constitution and in
it the requirement that Ministers of State be or become members of Parliament
and the requirement in section 6 that:
There shall be a session of the Parliament once at least in every . . . twelve months –
One comes in the light of those provisions - - -
GUMMOW J: Does not one have to look at sections 94 and 97 as well to understand how Part IV works?
MR GAGELER: Yes, your Honour, although they do not form a central part of my argument.
GUMMOW J: The Audit Act was a statute that answered the description “otherwise provides” in 97, was it not?
MR GAGELER: Yes, your Honour.
GUMMOW J: Is the Financial Management Act its successor?
MR GAGELER: Yes, it is. The Audit Act of 1901 gave effect to section 97 and the 1997 Act is its successor.
GUMMOW J: Does not the Constitution then tell you in Chapter IV something about the method of control of expenditure?
MR GAGELER: It tells you something about a method of control of expenditure certainly pursuant to the Audit Act, yes.
HAYNE J: Does it not replicate the English history which has been seen, at least by Redlich, as parliamentary supervision over the whole expenditure of the State being ultimately realised only once the audit provisions were made?
MR GAGELER: With the exception of the word “only”, yes, your Honour, it tells you that. It tells you that a mechanism of control was through the enactment of the Audit Act, subsequently the Financial Management and Accountability Act upon which we rely in these proceedings.
GUMMOW J: It is not just the enactment. If it had not been enacted, section 97 would have spoken.
MR GAGELER: Exactly, as section 83 would have spoken.
GUMMOW J: So it is a constitutional imperative that there be this system.
MR GAGELER: Yes, your Honour, and I think I am not at all arguing against your Honours. We rely for the prohibition in this case as the foundation for the declaratory and injunctive relief that we seek on the prohibition directly enacted in section 83, and we say it is a direct enactment of a prohibition, but also in the prohibition enacted in the provisions of the Financial Management and Accountability Act pursuant to section 97 of the Constitution. I will come to that.
I was about to take your Honours to sections 53, 54 and 56
which together concern how laws appropriating money are to be enacted by the
Parliament and together set out the manner of an appropriation
that is referred
to in section 81. Sections 53 and 54 deal with the relationship
between the Houses and section 56 deals with the relationship between the
Houses and the Executive. Going to section 53, it provides that,
relevantly:
Proposed laws appropriating revenue or moneys . . . shall not originate in the Senate . . .
The Senate may not amend proposed laws . . . appropriating revenue or moneys for the ordinary annual services of Government . . .
The Senate may at any stage return to the House of Representatives any proposed law . . . requesting, by message, the omission or amendment of any items or provisions therein.
McHUGH J: The
Solicitor-General for the Commonwealth says that the question of ordinary annual
services is not justiciable in the courts
of this country. Do you agree with
that?
MR GAGELER: We agree with that proposition, but we say
that in interpreting a law enacted in accordance with that non-justiciable
provision one
can take account of parliamentary practice as to how that
non-justiciable provision is implemented, and we will be asking
your Honours
to do that. Section 54 then provides that:
The proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation.
KIRBY J: Why would the whole question be non-justiciable? The whole - of whether it is ordinary annual payments. Why would that be a non-justiciable question? There must surely be a point at which an appropriation moves outside those words?
MR GAGELER: Your Honour, that is an arguable proposition. It is contrary to the views that have been expressed in this Court most recently in the Native Title Act Case [1995] HCA 47; 183 CLR 373 at 483. We do not seek to challenge those views.
What I was about to say about section 54 is, particularly
when read in the light of section 6, the clear contemplation is that there
will be at least, ordinarily, one law each year that answers the description of
a law appropriating revenue or moneys for the ordinary
annual services of the
Government. One then goes to an important contextual provision. It is
section 56, which provides relevantly
that a:
proposed law for the appropriation of revenue or moneys shall not be passed unless the purpose of the appropriation has in the same session been recommended by message of the Governor-General to the House –
Now, this is the Australian constitutional expression of a longstanding constitutional principle that is sometimes referred to as the financial initiative of the Executive and which is described, for example, at some length in the 23rd edition of Erskine May at pages 848 to 857. It is described in the 5th edition of Harris’ House of Representative Practice at pages 407 to 408, and it is described in the book by Durell, which your Honours have in the plaintiff’s legal materials at tab 5, at pages 24 to 25.
What that principle comes down to is this. When it comes to the appropriation of public moneys, the Executive asks - your Honours need not turn to the particular passage – and identifies the purpose of asking, and then the Parliament grants, or does not grant as the case may be, and where it grants it grants in the form an appropriation, that word meaning intrinsically the setting aside of part of the consolidated revenue fund to a particular purpose. Where it grants in the form of an appropriation, it simultaneously authorises the Executive to withdraw the amount of money appropriated from the Treasury - - -
McHUGH J: Does the House of Commons still have the Committee of Supply and the Committee of Ways and Means or has that been superseded?
MR GAGELER: We received the Court’s letter about current United Kingdom parliamentary practice. We have not been able to pursue that, your Honour. I just would not be giving your Honour a proper answer to that on my feet.
KIRBY J: You contend that purpose is justiciable.
MR GAGELER: Yes, but in a particular way to which I will come.
KIRBY J: I am just wondering why it is justiciable and yet ordinary annual services of the government are not.
MR GAGELER: For this reason, your Honour - - -
McHUGH J: I think it is because either Justice Brennan or I in Northern Cemetery spoke about it, but section 53 talks about a proposed law.
MR GAGELER: That is the difference. The difference is that sections 53, 54 and 56 are all concerned with procedure within the Parliament and it is talking about proposed laws. Sections 81 and 83 are concerned with the law once made.
GUMMOW J: As is 55.
MR GAGELER: Exactly, yes, like 55, and so it is - - -
KIRBY J: In the joint sitting case, steps relevant to the internal arrangements of the Parliament were examined by the Court and were held to be justiciable. I do not want to take you off your argument, but I just do not want you to assume that I accept that it is not justiciable.
MR GAGELER: It is an argument that I am not making, your Honour. I am not seeking to make an argument that - - -
KIRBY J: My point would be that great deference would be paid by a court to the internal process of Parliament but ultimately a point could be reached where the words “ordinary annual services of the Government” have to be given meaning and that falls to the Court.
MR GAGELER: Your Honour, I could accept that, but I am not making that part of my argument. Your Honours, the effect of an appropriation then that emerges through the process that begins at section 56 and emerges through section 81 in enactment of a law is that it simultaneously authorises the Executive to withdraw an amount of money from the Treasury and restricts the expenditure of that amount of money to the purpose identified in the law, that purpose having previously - - -
GUMMOW J: I am not sure whether the process does not finish until section 97, you see, which may then activate section 94.
MR GAGELER: It may well, your Honour. That is an old wound, your Honour, I think.
GUMMOW J: Well, maybe, but this is how they constructed it.
MR GAGELER: Yes, but it is 1907.
GUMMOW J: I realise that, but that is how this was constructed.
MR GAGELER: Yes. The point to which I was coming, your Honours, is in relation to the notion of the purpose of an appropriation. We fully accept, consistently with the view taken by the Supreme Court of the United States in relation to the equivalent appropriation power in Article 1 of United States Constitution in Cincinnati Soap Co v United States [1937] USSC 97; 301 US 308 at 321 to 322, that under our Constitution it is entirely a matter for the Parliament to determine the degree of particularity or specificity with which it chooses to express the purpose of an appropriation.
What we point out are two things. The first is that, as a matter of power, we say, deriving from the language and structure of section 56, section 81, section 83, and we would add section 97, there must be a purpose and that purpose must be capable of acting as a legal constraint, from which it follows that the purpose must be expressed by reference to some legally ascertainable standard or criterion sufficient to constitute a discernible and enforceable constraint on Executive conduct.
HAYNE J: That is a lot of words. What are you adding to the notion of purpose by the amplification that you give of that idea? You use words like “legally ascertainable”. What baggage are you seeking to load on to the phrase?
MR GAGELER: No baggage at all, I hope. What I am seeking to say is that the purpose identified in the law must be a purpose that was notified to the Parliament, that was therefore capable of scrutiny by the Parliament.
KIRBY J: I cannot hear you, Mr Gageler.
MR GAGELER: I am saying that the purpose identified in the law must be a purpose that was notified to the Parliament under section 56 that was therefore capable, at least, of being scrutinised by the Parliament.
McHUGH J: Why cannot you take into account the social context of payments? Supposing the Parliament makes a grant to Bondi Surf Club. Now, arguably, that is not for the purpose of the Commonwealth, but if the social context is that because they are going to hold an Olympic event at Bondi it may well be for the purpose of the Commonwealth.
MR GAGELER: Can I take your Honour’s example? The purpose of the Commonwealth is the payment to Bondi Surf Club. It is a legally ascertainable criterion – it is expressed, I am sorry, by reference to a readily ascertainable criterion. The question as to the legality of the Commonwealth Executive action in paying the money over is simply a question of was it paid to the designated entity. That, in a sense, illustrates my point, your Honour.
HAYNE J: Yes, but again the devil is in “readily ascertainable criterion”.
MR GAGELER: Yes.
HAYNE J: Are you making any proposition that appropriation by outcome falls outside section 81?
MR GAGELER: It depends on how the outcome is expressed and what I will be putting to your Honour, as a matter of construction, is we need not get to that point because on a proper construction the designation of outcomes is simply a label for a group of outputs and the outputs are readily identifiable but I will come to that in due course.
GUMMOW J: But you do not say – I thought your submissions did not dispute, and it would be hard to see how they could after Bardolph’s Case of so long ago, that government advertising can amount to a purpose of the Commonwealth.
MR GAGELER: No.
McHUGH J: You concede that in your written submissions, do you not?
MR GAGELER: There is no point take about the scope of “executive power” under section 61, nor is there any point taken about “purposes of the Commonwealth” for the purposes of section 81. This is a case about appropriating the money to spend.
GUMMOW J: So what is the constitutional text on which you then fix?
MR GAGELER: Appropriation, your Honour, but it is an appropriation for a purpose and that is the point that I am seeking to emphasise now.
GUMMOW J: You are saying this is not an appropriation?
MR GAGELER: No, I am not saying that.
GUMMOW J: In a constitutional sense?
MR GAGELER: I am seeking to uphold an appropriation. I am seeking to say that there is an appropriation, there is a very distinct appropriation, and what the Commonwealth Executive is seeking to do here is to draw moneys outside the appropriation that has been made.
GUMMOW J: They could have done it, albeit, they could have done it in a fashion that was a purpose of the Commonwealth.
MR GAGELER: Albeit, they could have done it by notifying the purpose to the Parliament, having it scrutinised, particularly in the Senate, and then having it enacted as a purpose – an identified purpose, absolutely, yes. Your Honours, what I have attempted to formulate as the nature of the “purpose” is, we think, the effect of the authorities that we have referred to in paragraph 31 of our written submissions, and, particularly, we think it is what Sir John Latham was saying in the Pharmaceutical Benefits Case in [1945] HCA 30; 71 CLR 237 at 253 in a passage that was later picked up and quoted by all members of this Court in Brown v West, to which I will later come. I will not read it but it is the passage at the end of the paragraph concluding on that page. What is said, as we understand it, about - - -
GUMMOW J: But he was construing the phrase “purposes of the Commonwealth”. That is what the case decided.
MR GAGELER: Yes, he was, but what he said, your Honour, in that context is the last two sentences of page 253 and he said that in the context of sections 81 and 83 but picking up the procedural provisions that he mentions earlier up, sections 53, 54 and 56. It was those last couple of sentences that were picked up and quoted with approval by all members of the Court in Brown v West.
We also see it, your Honours might just note this, as the effect of the authorities referred to by Professor Campbell in her article that we have given your Honours in our legal materials at tab 7, pages 154 to 155, and especially at footnote 39. So that is what we say - - -
KIRBY J: What do you get from Professor Campbell’s article?
MR GAGELER: You get a lot of cases drawn from other jurisdictions about the need for some degree of specificity in an appropriation language of ascertainable amount for a specific purpose. Your Honours, the second thing that we wanted to say about the power of the Parliament to choose the degree of particularity or specificity with which it expresses an appropriation is this, that when one comes as a matter of construction to seek to give meaning to the words that have in fact been used by the Parliament to identify the purpose of an appropriation, the construction ought take account of the constitutional provision for and the deeply embedded practice of parliamentary scrutiny of the purpose of an appropriation.
That was, as we understand it, a point that was made in Brown v West – again I will come to that – and it was the point made by Justice Murphy in the quotation from the Australian Assistance Plan Case that we have out in our written submissions in paragraph 32. So that, in our submission, to the extent that there is any ambiguity at all, the Court should prefer a construction that tends to greater specificity and thereby enhances the parliamentary control over the Executive.
HAYNE J: How does that fit with the first proposition you made that it is for Parliament to decide the level of particularity with which the appropriation specifies the purpose?
MR GAGELER: Perfectly. Really, your Honours, this is the point of our reference to Coco v The Queen in footnote 63 of our submissions. Our learned friend said they did not understand it.
KIRBY J: Mr Gageler, when you turn to your right, I cannot hear you. If you want me to hear you, you have to speak to the microphone.
MR GAGELER: I will attempt to do that. The point is, your Honour, that there is a parliamentary process that results in the statement of a purpose, and a construction of the purpose that best enhances the parliamentary process is to be preferred. That is, Parliament can do it, Parliament can specify any purpose it likes subject to the constraint that I have identified, but in construing what Parliament has done, the Court ought lean in favour of a way of construction that enhances the parliamentary process for which sections 53, 54 and 56 provide.
HAYNE J: How does that sit with outcome appropriation?
MR GAGELER: Again, on our construction, perfectly. The outcomes on our construction are a label for a group of outputs and a group of outputs are very carefully scrutinised by the Parliament, very carefully identified to the Parliament and scrutinised by the Parliament. I will show your Honour that in a moment. I will come next to the statutory context.
GUMMOW J: That is what I wonder about, because at some stage you will have to identify what the matter is.
MR GAGELER: The matter?
GUMMOW J: Yes.
MR GAGELER: It is a matter arising under section 75(v) of the Constitution.
McHUGH J: Yes, I know, but you have to do it more particularly, particularly since in Croome’s Case some of us said that standing cannot be divorced from matter.
MR GAGELER: No, I understand that. If your Honour’s question is about standing, I will come to standing at the end of my argument.
GUMMOW J: It was not about standing actually.
MR GAGELER: Well, subject to standing.
GUMMOW J: It was about jurisdiction.
MR GAGELER: Subject to standing, the jurisdiction that we invoke is section 75(v) of the Constitution.
GUMMOW J: Yes. So you want an injunction to restrain what?
MR GAGELER: I was going to come to this in the statutory context, but can I take your Honours to the Financial Management and Accountability Act, which is the successor to the Audit Act, and I will answer your Honour Justice Gummow’s question in about three minutes I hope. Your Honours will see that it contains in section 5 a number of relevant definitions. There is a definition of “agency”, which includes “a Department of State”; there is a definition of “appropriation” of CRF, or Consolidated Revenue Fund; there is a definition of “official” and a definition of “public money”.
Section 26 makes it a criminal offence for an official or Minister to
make a payment of public money or to debit or request the debiting of
an amount
against an appropriation without a valid drawing right. Then section 27
deals with the issue of drawing rights. It provides in subsection (1) for
a drawing right to be issued by the Finance Minister,
who may act through a
delegate, your Honours might notice, provided by section 62, and then
section 27(5) provides:
A drawing right has no effect to the extent that it claims to authorise the application of public money in a way that is not authorised by an appropriation.
GUMMOW J: Yes. It just strikes me that you want an injunction to restrain an apprehended crime.
MR GAGELER: Well, no, I do not. If I had asked for that, your Honours may have had - - -
GUMMOW J: Why is that not the substance?
MR GAGELER: - - - a discretionary reason for not granting it.
GUMMOW J: Well, what is the legal norm that you seek to enforce?
MR GAGELER: At page 42 of volume 1 of the special case book, which must be read in the light of paragraph 13 of the special case at page 41, and paragraph 14 – I am so sorry, I have taken your Honours to the equivalent provisions in the statement of claim. It is at page 5 in the special case, paragraphs 12, 13 and 14. So that is the current intention of the Executive Government. That is to pay for the advertisements using public moneys drawn from the Treasury of the Commonwealth. To that end, a delegate of the Minister for Finance has issued drawing rights under section 27 of the Act authorising persons in the second defendant’s Department to make payments of public money under the authority of a particular identified appropriation.
GUMMOW J: Yes, exactly.
MR GAGELER: That is conduct which, if it occurs, in our submission, will be directly contrary to section 83 of the Constitution, that is be prohibited - - -
GUMMOW J: What about section 26 of the Act?
MR GAGELER: Well, the issue of the drawing rights, your Honour, the point about that is that the Act would be of no legal effect, that is, the executive action of issuing the drawing right would be of no legal effect if there is no appropriation – of no legal effect because of section 27(5). So we seek to restrain, or have declared invalid and then restrain further acts which would be invalid by reason of section 27(5).
GLEESON CJ: Then contravention of section 26(a) of the Financial Management and Accountability Act.
MR GAGELER: Correct, if it were acted upon. Yes, if it were acted upon, but it has not been acted upon.
GLEESON CJ: It is the threat to act upon it that brings us here, is it not?
MR GAGELER: It may bring us here, but we have confined the relief in a way that does not get us to the point of criminal liability under section 26. Our case, your Honours, cannot be worse off because at the end of the road there is criminal liability if the constitutional and statutory scheme is ignored.
GUMMOW J: I am trying to find out - you want an injunction - - -
MR GAGELER: Yes.
GUMMOW J: - - - you have to show some invasion of a legal right or contravention of a legal norm. What is the legal norm?
MR GAGELER: Leaving standing aside for a moment, your Honours - - -
GUMMOW J: I am not worried about standing at the moment. I am assuming you have got a fiat from your colleague there from Western Australia.
MR GAGELER: What we want, and your Honours see this at page 42 of volume 1 of the special case book, we want a declaration that the drawing of money to pay for the advertisements is not authorised by the departmental - - -
GUMMOW J: You want an injunction. Paragraph (3).
MR GAGELER: But I am just pausing a moment, your Honour, with the declaration. As I understand it, nobody disputes that if we are right we can get that declaration.
GUMMOW J: The questions I am putting to you, Mr Gageler, are equally applicable to declarations, which is another record in remedy.
MR GAGELER: Yes.
GUMMOW J: Right? The 75(v) remedy happens to be injunction.
MR GAGELER: Yes.
GUMMOW J: And the declaration is parasitic to it.
MR GAGELER: Yes. I am appreciating that, your Honour. The declaration in subsection (1) is a declaration as to the meaning and effect of a Commonwealth law. The declaration in subsection (2) follows from that and it is the application of section 27(5) to any drawing rights that have been issued in the past and the injunction in subparagraph (3) is one that seeks to restrain future conduct that if it occurred would be of no legal effect because of section 27(5).
GUMMOW J: What are the other provisions in the Financial Management Act which would provide for the sort of supervision that section 97 of the Constitution is talking about, the sort of investigations the Auditor-General under the old Act used to conduct.
MR GAGELER: There are provisions in another Act, which is the Auditor-General Act, that provide for investigations.
GUMMOW J: Yes.
MR GAGELER: But when your Honour says that section 97 is providing for, in our submission, the provisions that I have just taken your Honour to are precisely the sort of provisions that fall within the scope of section 97.
GUMMOW J: Some of them.
MR GAGELER: They are not the whole lot.
GUMMOW J: No.
MR GAGELER: They are not the whole lot, but they are certainly an aspect and a very strong aspect of statutory controls.
GUMMOW J: The question then is at what stage does the judicial power get engaged through the injunctive remedy?
MR GAGELER: Your Honour, the judicial power - - -
GUMMOW J: One view of it is it gets engaged in the Auckland Harbour Case with a clawback situation for a payment which was made out, paid out that should not have been paid out and it is clawed back from the recipient.
MR GAGELER: Yes.
GUMMOW J: But this is well before that situation.
MR GAGELER: Your Honour, it is at the point at which the Constitution speaks. That is, section 83 of the Constitution speaks of withdrawing money from the Treasury, direct prohibition. We seek to enforce that direct prohibition. Section 27 of the Constitution speaks of issuing a drawing right and we seek to enforce section 27 – I am sorry, of the Financial Management and Accountability Act. So we are talking about distinct Acts which are the subject of distinct legal constraints.
GUMMOW J: The relevant norm, you say, is also section 83.
MR GAGELER: Yes. I said that I was going to mention another Act to your Honours and I mention it only in passing.
GUMMOW J: Would any such remedy as we are talking about here lie in the United States? Same words, any remedy in the United States ever in a similar situation in the last 200 years.
MR GAGELER: I cannot answer that, your Honour. Why I cannot answer that is because, one, I do not know but, two, your Honour, the provision upon which we rely – section 75(v) – of course has no equivalent in the United States Constitution. There are plenty of cases, particularly the ones that are footnoted in Professor Campbell’s article, which I have mentioned, where there have been justiciable issues about the scope of an appropriation in the United States but the remedy I cannot - - -
HAYNE J: Was not the history of the matter that the original audit provisions obliged the auditor to sign off on the warrant?
MR GAGELER: Under the Audit Act?
HAYNE J: Yes.
MR GAGELER: Under the Audit Act (Cth)?
HAYNE J: Yes.
MR GAGELER: Yes. The original scheme was that before any monies were drawn from consolidated revenue fund, which only occurred by the Governor-General doing so, the Treasurer issued a warrant and then the Auditor-General checked the warrant against an appropriation and only then would the appropriation be issued. Then a recommendation was made to the Governor-General and then the appropriation would issue so it was a very stringent exercise.
CALLINAN J: Mr Gageler, Part 8 of the Financial Management Act is concerned with audits also, section 54 and onwards.
MR GAGELER: Yes, there is a reporting requirement.
CALLINAN J: Yes.
MR GAGELER: Thank you, your Honour, and there are also provisions - and I will give your Honour a reference - in the Auditor-General Act 1997 which deal with the role of the Auditor-General and the Australian National Audit Office, again, an ex post checking of what has occurred, and reporting.
KIRBY J: Is section 97 of the Constitution a spent provision in that it opens with those familiar words, “Until the Parliament otherwise provides”?
MR GAGELER: It is a provision that because it says that gives you a peg back to section 51(xxxvi) of the Constitution which confers legislative power on the Parliament with respect to matters in respect of this Constitution, makes provisions “until the Parliament otherwise provides”. So, in a sense, it is spent.
KIRBY J: And has that been interpreted to mean that it must be provides on the subject matter of 97 or an equivalent section?
MR GAGELER: I think the effect of it, and it has been considered in a number of cases, the effect of it is that the constitutional provision that makes it own specific provision continues unless and to the extent that Parliament makes some other specific provision.
KIRBY J: But it could not revive, could it - 97 could not revive in its own terms because the Parliament has otherwise provided.
MR GAGELER: Your Honour is probably right.
KIRBY J: But I suppose we get a hint what would be the otherwise provision by reference to the language of 97, itself.
MR GAGELER: Yes. Your Honours, the other aspect of the statutory context which I simply mention to move on, I mention it only because the title of the Act sounds like it should be relevant, it is the Charter of Budget Honesty Act 1998 and your Honours will see section 3 enacts and makes non-judiciable the charter of budget honesty which is set out in Schedule 1 and the only relevance, and it is very much background, of that is that your Honours might note within the charter, in clause 10, there is a requirement for the Treasurer to publicly release and table a budget economic and fiscal outlook report at the time of each budget. That is something that gets performed through budget paper No 1 that your Honours will see a reference to in other documents, budget paper No 1, together with other budget papers being tabled with the Bills for Appropriation Act (No 1) and Appropriation Act (No 2).
In
clause 14 there is requirement for the Treasurer:
to publicly release and table a mid-year economic and fiscal outlook report by the end of January in each year, or within 6 months after the last budget, whichever is later.
That is a document to which reference is made in budget paper
No 2. Your Honours, can I move to parliamentary practice?
Your Honours
have been provided with an extract from the fifth and current
edition of Harris House of Representatives Practice. May I go to that
and use it as a lever to move into some other materials? At page 414 of
that document there is a section that
deals with “APPROPRIATION AND SUPPLY
BILLS”. It commences with a “Summary of annual financial
legislation”
and says:
The Parliament appropriates moneys from the Consolidated Revenue Fund on an annual basis in order to fund expenditure by the Government. Prior to 1999 the appropriation of funds by the annual appropriation bills expired at the end of the financial year on 30 June. The annual appropriations, although related to activity in a specific year, no longer lapse at the end of the year – appropriations for departmental expenses are open ended, while appropriations for administered expenses are limited to expenses incurred in that year.
Appropriation Bill (No 1) is a key element in ‘the Budget’; it contains details of estimates for ordinary annual government services – that is, continuing expenditure by government agencies on services for existing policies.
Your Honours will note footnote 43:
Since 1994 usually introduced in May.
Previously, the budgets were in August. Then:
Appropriation Bill (No 2) is also introduced as part of the Budget and appropriates funds for expenditure on new policies, new capital expenditure –
and the like. I pass over Appropriation (Parliamentary
Departments) Bill and then:
Appropriation Bills (No 3) and (No 4) . . . are referred to as the additional or supplementary estimates. Appropriation Bill (No 3) appropriates funds for administrative expenses, while Appropriation Bill (No 4) provides for capital expenditure – thus they parallel Appropriation Bills (No 1) and (No 2) respectively. They are necessary because departments exhaust some of the funds provided by Appropriation Bills (No 1) and (No 2) . . .
Supply bills make interim provision for expenditure when the main appropriation bills are not going to be passed before the start of the financial year on 1 July. Supply bills are no longer part of the normal annual routine, but were necessary in the past when Budgets were introduced in August.
Now, at page 415 there is a discussion of the understanding
reached between the government and the Senate concerning what is encompassed
within “the ordinary annual services of the Government” for the
purpose of sections 53 and 54 of the Constitution. That gave rise to the
Compact of 1965 which is referred to about the middle of the page:
The distribution of appropriations between the (No 1) and (No 2) bills was the subject of negotiation and agreement between the Government and the Senate in 1965, when the Treasurer announced that henceforth there would be a separate bill (Appropriation Bill (No 2)), subject to amendment by the Senate, containing appropriations for expenditure on –
then a number of things are mentioned, the last one
being:
new policies not authorised by special legislation (subsequent appropriations to be included in the Appropriation Bill (No 1) not subject to amendment by the Senate).
In 1999, with the introduction of accrual accounting to the Budget process, the Senate agreed to government proposals to vary the contents of the two appropriation bills as follows -
The first dot point does not matter. The second one:
all appropriation items for continuing activities for which appropriations have been made in the past be regarded as part of ordinary annual services –
The events around 1965 and 1999 are recorded in more
detail in some materials in volume 3 of the case stated book, to which I will
come. At page 416 there is then a description of the components of the annual
budget. Appropriation Bill (No 1) is the first, and
what is there recorded
is:
The main appropriation bill for the year (Appropriation bill (No 1)) is an integral part of the Government’s Budget proposals. The ‘Budget’ is the term ordinarily used for the annual financial statement presented to the House by the Treasurer and includes the Appropriation Bills (Nos 1 and 2), the Appropriation (Parliamentary Departments) Bill, documents relating to the bills and other legislation to give effect to the Budget –
and I will take your Honours to page 420 in a
moment –
The introduction of the Appropriation Bill (No 1) is the first parliamentary step in placing the Budget before the House.
There is then a reference to the message that is required by
section 56 of the Constitution:
The introduction of the Appropriation Bill (No 1) is preceded by the announcement by the Speaker of a Governor-General’s message recommending ‘an appropriation for the purposes of a Bill for an Act to appropriate money out of the Consolidated Revenue Fund for the ordinary annual services of the Government, and for related purposes’.
The long title of the bill introduced must be identical to the title of the bill cited in the Governor-General’s message.
There is then a reference further on to:
SECOND READING-BUDGET SPEECH AND DEBATE
In moving the second reading, the Treasurer delivers the Budget speech –
and at the conclusion of the budget speech there is an
adjournment usually on the motion of the Leader of the Opposition, and then
it
records:
The debate on the second reading of the Appropriation Bill (No 1) is known as the ‘Budget debate’ –
and continues on usually for some time. At page 420
your Honours will see a heading at the top of the page, “Budget
Papers
and related documents”. What is there said is:
Associated with the Budget are certain related documents and bills. After debate on Appropriation Bill (No 1) has been adjourned, Budget-associated documents are normally presented. The nature and titles of these documents have varied. In 2004 the Treasurer presented the following papers –
your Honours will see these replicated in
2005 –
• Budget Strategy and Outlook, containing information on the economic and financial outlook, together with information on the fiscal strategy (Budget paper No 1) -
As I have shown your Honours, that has a statutory
basis –
• Budget Measures, providing a comprehensive statement on the budget expense, revenue and capital measures in the Budget (Budget paper No 2)
• Federal Financial Relations . . . (Budget paper No 3)
• Agency Resourcing, containing information on resourcing for Commonwealth agencies, including Appropriation Bills Nos 1 and 2, and the Appropriations (Parliamentary Departments) Bill (Budget paper No 4).
Together with a pamphlet copy of the Treasurer’s speech these documents are presented as the ‘Budget Papers’. At the same time the Treasurer may also present other ‘Budget related papers’. Alternatively such papers may be presented by another Minister or a Parliamentary Secretary at a later stage of proceedings. Portfolio Budget Statements, also listed as ‘Budget related papers’, are available from individual departments after the Budget.
If your Honours go back to page 417, at the bottom of the
page what is recorded is:
After copies of the budget documentation –
that we have just looked at on page 420 –
are presented in the Senate on Budget night, the ‘particulars of proposed expenditure’ (the schedules in the appropriation bills containing the estimates) and the Portfolio Budget Statements are referred to Senate legislation committees. This allows Senate consideration of the estimates before the appropriation bills have passed the House of Representatives. The Senate legislation committees in estimates mode conduct public hearings over a two week period while the House is engaged in the budget debate.
The process of the Senate Legislation
Committee - they used to be called Senate Estimate Committees –
is fully described in
Odgers in volume 3 of the special case book at
pages 1477 to 1482, and I will come to aspects of that discussion in a
moment. Within
the House of Representatives, your Honours will see at
page 418 a description of the consideration in detail that occurs in the
House
of Representatives and examples of amendments that have been made from
time to time even in the House of Representatives to reduce
expenditure on
particular items. I will not go through the detail of that. Your Honours
also perhaps ought note page 421. That
deals with additional appropriation
Bills.
KIRBY J: Can I just get it clear. The constitutional prohibition on amendment does not stop debate in the Senate. Though it cannot lead to an amendment, it may lead to greater transparency in relation to the budgetary process, is that correct?
MR GAGELER: More than that, it can lead to a request. If one is concerned with something that the Senate accepts is properly within Appropriation Bill No 1, then the Senate cannot amend it but the Senate can request its amendment in a formal resolution.
KIRBY J: Is that dealt with by Harris?
MR GAGELER: That is more fully dealt with by Odgers.
GUMMOW J: The fourth paragraph of section 53.
MR GAGELER: It comes
from section 53 but the process is dealt with in Odgers, and I will come to
that in a moment, your Honour. The last thing
I wanted to draw
your Honours’ attention to in Harris is at page 421 that deals
with additional appropriation Bills. What
is there recorded is that:
Where an amount provided in the Appropriation Acts (Nos 1 or 2) is insufficient to meet approved commitments falling due in a financial year, additional or supplementary appropriation may be sought in further appropriation bills. These are usually designated Appropriation Bill (No 3) for expenditure in respect of the ordinary annual services of the Government, and Appropriation Bill (No 4) for expenditure in respect of other than the ordinary annual services.
KIRBY J: There is a reference there to the tsunami financial assistance Bill.
MR GAGELER: I was going to mention that, your Honour.
KIRBY J: Some point is made in the Commonwealth’s submission that there is a need to be able to react flexibly to particular occasions, which seems a reasonable point.
MR GAGELER: Yes, and the reasonable answer to that quite reasonable point is that Parliament has done so through the enactment of special legislation when necessary.
KIRBY J: But some emergencies are more emergent than others. Presumably what happened to the other appropriation was that moneys which had been appropriated in departments for particular purposes revealed to the Parliament were somehow diverted for tsunami relief without any parliamentary consideration.
MR GAGELER: And that extraordinary circumstance was given parliamentary ratification through the particular Act, the - - -
KIRBY J: Is that correct? I understood there to be two processes. One was using, as it were, unused funds of departments for tsunami relief and the other was to make a special enactment for additional funding, which is what the Appropriation (Tsunami Financial Assistance) Bill was.
MR GAGELER: Your Honour, I do not want to get distracted at this stage by that particular piece of legislation. As we understood it, both of those processes to which your Honour refers were the subject of legislative consideration and approval.
KIRBY J: But the point is a vivid argumentative one and it is that there ought in our constitutional arrangements, if the words allow it, to be a way to deal with emergencies.
MR GAGELER: Yes, your Honour, the answer is that the Appropriation Acts do contain a specific provision that is designed to deal with emergencies. Your Honour will see a reference to that at page 422 of Harris. It is the advance to the Minister for Finance, and I will come to that and I will show your Honour an example in Appropriation Act (No 1), but it is a specific provision specifically designed to deal with emergencies.
The practice in the Senate, if I could come to that, is in
Odgers, volume 3 of the case stated book and I have already mentioned,
your Honours, the relevant pages that deal with the process of Senate
scrutiny of the budget papers. That is page 1477 and following.
What is
said, line 45, page 1477 is:
The Senate has a system which allows intensive scrutiny of government expenditure proposals, or estimates, before the appropriation bills reflecting those proposals are received by the Senate.
The basis of this system is the scrutiny of estimates, from 1970 to 1994 by estimates committees and from 1994 by legislation committees. Schedules of the proposed expenditure contained in the main annual and additional appropriation bills are tabled in the Senate when the bills are introduced into the House of Representatives, and are referred to the committees for examination.
These committees provide the principal opportunity for senators to scrutinise, not only the expenditure proposals of the government, but the operations and activities of government departments and agencies.
McHUGH J: As a matter of practice, the Senate committees even hear evidence before the appropriation Bills have been passed by the reps, do they not?
MR GAGELER: Yes, that is the process that
is being described here and they do do so in public hearings generally. About
line 14:
The committees, for each group of annual and additional appropriation bills, hold a main round of hearings at which all items of expenditure are open to examination, and in relation to the annual appropriation bills a supplementary round of hearings, after answers to questions taken on notice are received, which are confined to matters senators have notified for further questioning.
The committees report after their main hearings, and draw attention to any matters for further consideration by the Senate . . .
The introduction first of program budgeting and subsequently of output-based accrual accounting by government departments reinforced the practice. The requirements of estimates committees for more detailed explanations of expenditure proposals led to the development by departments of voluminous explanatory notes on the estimates and the tabling of those notes in the Senate. With program budgeting these notes were replaced by program performance statements, and then by output-based portfolio budget statements. These statements –
that is, the portfolio budget statements –
are tabled in the Senate and used by the committees as the basis of their scrutiny . . .
It is considered that normally the appropriation bills should not be passed until the committees have concluded their supplementary hearings. The rationale for this is that the supplementary hearings may lead to senators wishing to move amendments or requests to the bills. The second reading debate on the bills may take place before the committees conclude their supplementary hearings.
So that is the answer to your Honour’s question of timing. Earlier in Odgers at pages 1469 to 1477 there is a description of the general procedure in the Senate in relation to financial legislation. There is a description, your Honour Justice Kirby, of the process of the Senate often requesting amendments in respect of appropriations for the ordinary annual services of Government and other matters.
There is at
page 1475, and concluding on 1477, a short history of the Senate on
occasions pressing requests, when a request has first
been refused by the House
of Representatives. There is a reference about line 23 to:
A list of occasions on which the Senate has made requests . . . contained in appendix 6.
Your Honours do not have that in the special case book but it is being separately provided and I simply wanted to draw your Honours’ attention in appendix 6 to Odgers to both the length of the appendix and to the first two items that are recorded in it, that is, in the first session of the Federal Parliament what one found was a request in relation to Supply Bill No 2 that the House of Representatives amend the Bill to show the items of expenditure comprised in sums which the Bill purports to grant and that was disposed of by the Bill not being returned by the House of Representatives but a second Bill forwarded showing items as requested and then the next entry concerning the Consolidated Revenue Supply Bill (No 2), in the same session, request to alter Bill so that supply should be for joint grant of two Houses and that request was also complied with.
McHUGH J: Supply Bills no longer exist, do they?
MR GAGELER: That is correct but supply was just another form of appropriation, an interim form of appropriation. Actually in those days I am not sure that Appropriation Bills were not called Supply Bills Compact. Your Honours, I said I would return to the detail of the of 1965. That is the subject of a fairly full discussion in Odgers - - -
HAYNE J: In aid of what proposition?
MR GAGELER: The proposition your Honours will see at the end of our written submissions and that is, as a matter of construction. Your Honours can take into account parliamentary practice concerning what is and what is not included within the ordinary annual services of government and that expenditure on new policies is not treated, internally within the Parliament, as something that one would ordinarily find within Appropriation Act (No 1). That is the proposition.
GUMMOW J: Paragraph 46 point 7, is it, of your submissions, Mr Gageler?
MR GAGELER: Thank you, your Honour, yes,
so it is in aid of that proposition. Your Honours see in volume 3,
page 1453, the terms of the Senate
resolution that embodied the Compact
between the Senate and the government in 1965 and that resolution was first that
the Senate:
reaffirm its constitutional right to amend proposed laws appropriating revenue or moneys for expenditure on all matters not involving the ordinary annual services of the Government.
(2) That appropriations for expenditure on . . .
(e) new policies not previously authorised by special legislation,
are not appropriations for the ordinary annual services of the Government and that proposed laws for the appropriation of revenue or moneys for expenditure on the said matters shall be presented to the Senate in a separate Appropriation Bill subject to amendment by the Senate.
That resolution was
reaffirmed by a further resolution in 1977 that your Honours see at
page 1500 and it was reaffirmed in terms and
that reaffirmation followed
the recommendation of the Senate Standing Committee on constitutional and legal
affairs in a report that
your Honours have at
page 1488.
KIRBY J: I see that Senator Missen was the mover of this motion.
MR GAGELER: Yes, and if your Honour looks to page 1489, your Honour will see that he was Chairman of the Committee, the report of which resulted in that motion.
KIRBY J: But it was an all party committee.
MR GAGELER: Yes. This is a longstanding
bipartisan policy. At page 1495, in the body of the report,
your Honours will see a discussion of
paragraph (e) of the Compact.
An issue is raised – paragraph 22, bottom of the page:
Paragraph (e) of the 1965 compact is an abbreviated reformulation of the recommendation of the committee of Government Senators that:
As far as possible, the first provision for new policies which have not been authorised by special legislation, and for which the only Parliamentary authorisation proposed is an annual Appropriation Act, should included in a Bill for other than the ordinary annual services of the Government –
and the underlining was added by this 1977 committee. It is
then said:
An issue arose in October, 1973 in Estimates Committee C as to whether certain appropriations should be included in the non-amendable Appropriation Bill when legislation to authorise these new policies had been introduced into Parliament or was about to be introduced into Parliament. The then Treasurer stated that these appropriations were distinguishable from appropriations for other new policies appearing in the amendable Bill as the latter would be items ‘for which the only Parliamentary authorisation proposed is the annual Appropriation Act’.
24. When a similar issue arose in Estimates Committee A the following year, that Committee expressed its opinion that the apparent ambiguity in the words relied upon by Mr Crean (above) could be resolved by reading them in conjunction with the paragraphs next following in the Government Senators’ report.
I will not read those paragraphs, but the bottom line is
paragraph 25:
It is the opinion of this committee that the 1965 compact, considered in the light of the Government Senators report upon which it was based, does not lend itself to an interpretation that a Government can place any financing for new policies in a non-amendable Bill purely on the basis that the required legislation would be forthcoming at a later date.
Now, it is necessary, your Honours, to look in some detail at the reaffirmation and slight modification of the Compact that then occurred in 1999, in part because it is an introduction to the notion of accrual or output accounting that was introduced then as well. At page - - -
HAYNE J: There are three ideas in play, are there not, that need to be kept separate?
MR GAGELER: Yes.
HAYNE J: There is accrual accounting, there is outputs and there is outcome appropriation. The three have become linked.
MR GAGELER: Yes.
HAYNE J: I understand that, as a matter of history.
MR GAGELER: Yes.
HAYNE J: But the three are distinct ideas, are they not?
MR GAGELER: Reasonably distinct, your Honour. Well, we will come to that.
HAYNE J: I am waiting for your explanation of outcome appropriation, Mr Gageler, with bated breath.
MR GAGELER: I am ready for it, your Honour. You will get one. It is just about to start. Page 1212, you see a letter from the Minister for Finance to the President of the Senate, and it attaches the paper that begins at page 1213.
What that paper
says, about line 16, is that:
The Government will present its 1999-2000 Budget on an accrual basis. The focus on outcomes and outputs under an accrual budget means that the Commonwealth’s financial infrastructure needs to be modified. The 1965 Compact has been applied to a cash-based, input focused system to date and needs to be updated for accrual budgeting to be effectively implemented.
I will leave “The Proposal” aside for a moment. There is a heading at the bottom of the page, “The Structure of appropriations under an accrual framework”:
The introduction of accrual budgeting means that the Commonwealth and its agencies are changing how they plan, budget and report. The focus is on outcomes and outputs, not programs and inputs. For instance, agencies will specify their outcomes and detail the outputs to achieve them. The accrual budgeting reforms change both what is measured and the basis of measurement. As a result, the financial performance of agencies and the Government should become more transparent.
Changing to the outcomes and outputs framework has important implications for the structure of Appropriation Bills 1 and 2. The bills will no longer appropriate for the cost of inputs or programs; they will appropriate funding on the basis of outcomes. Attached is a copy of proposed accrual appropriations for a hypothetical agency. There are some important changes to be noted –
The attachment your Honours will see at page 1218 to 1219. This is the form of the schedule to Appropriation Act (No 1) to which I will come in due course but your Honours see the basic structure is you have a list, relevantly – you have a column that deals with “Departmental Outputs” and you have rows of outcomes expressed in general terms, those rows clearly enough designating some cluster of outputs.
HEYDON J: Mr Gageler, the last two lines on page 1218, is that a standard aspect of practice now, that there is only “a notional allocation”?
MR GAGELER: Yes, that is right, your Honour. That was always the position, even under the Audit Act 1901. Your Honour might note section 37 allowed moneys to be moved around between different items within the same subdivision but that could only occur through a direction of the Governor-General.
KIRBY J: Could you explain how this makes things more transparent?
MR GAGELER: Yes. It is through the portfolio budget statements that it becomes more transparent.
KIRBY J: The hortatory outcomes that one sees seem to be designed to do the opposite.
MR GAGELER: That is why you cannot read them in isolation, your Honour.
KIRBY J: I mean, at least, if it is a program, well, it is concrete, whereas hortatory statements are much more arguable and less specific but the Senate on the next page, 1220, through the President, said that “The committee has agreed” and it was considered that it was consistent “with the spirit of the 1965 Compact”.
MR
GAGELER: Your Honour has to take the whole package because the Senate
was agreeing to a package where the detail would become more transparent
through
the portfolio budget statements spelling out what were the departmental outputs
that were designated by the particular label
of the outcome. Your Honour
sees that is explained to the Senate at page 1214. At 1214 it is said at
the top of the page:
For each outcome the total funding for departmental and administered items will be shown.
In accordance with accrual accounting principles, departmental expenses are expenses that an agency has control over. These expenses represent the ordinary operating costs of Government Departments and agencies. They include:
. salaries;
. operational expenses –
et cetera.
Departmental expenses will be notionally split between outcomes (as in the attached hypothetical example), thereby providing in the Appropriation Bills an indication of the departmental resources to be allocated towards the achievement of key outcomes for agencies. However, this split will be for information purposes only, with departmental items to be appropriated, as running costs are now, as a single amount for each agency. This will maintain the flexibilities to adjust departmental outputs to take account of emerging priorities available under present running cost arrangements. The single appropriation for departmental items will represent the price to be paid by Government for all the outputs the agency plans to deliver.
Just translating that if
I may to what your Honours see at
page 1218 - - -
GUMMOW J: What is an output that is planned to be delivered?
MR GAGELER: An output is an activity or thing for which government pays. So the notion that changed – and I do know about this and I will be taking your Honours to it – was rather than the Commonwealth, as it were, paying for inputs, paperclips, paper and the like, it paid for an output, which was the provision of policy advice by its department. That is the basic notion.
GLEESON CJ: I suppose building a courthouse is an output and improving the administration of justice is an outcome.
MR GAGELER: That is right, and the idea is – if I can use that analogy for a moment, the Commonwealth would say the appropriation is simply improving the administration of justice, that is it, that is the purpose, and we say no, the appropriation is for building the court to achieve that end. In fuller answer to your Honour Justice Kirby’s question - - -
HAYNE J: But is the consequence of the point you have just made that you say the appropriations are to be read as looking at both sides of the ledger?
MR GAGELER: The appropriations are appropriations to purchase outputs that are designated by a high level label of an outcome but are spelt out in detail in the portfolio budget statements. So the appropriation is for outputs, in our respectful submission.
HAYNE J: An output can be described at a high level of abstraction?
MR GAGELER: Yes.
HAYNE J: The department’s provision of support to the Minister?
MR GAGELER: Yes, for example. At page 1214 - - -
KIRBY J: Are we at any stage in this proceeding concerned to decide whether or not it is compatible with the specificity of the constitutional design, in particular the design that keeps the Senate out of amending certain appropriation Bills, to permit this outcomes form of budgeting?
MR GAGELER: I will be asking your Honour to take that into account in construing what the Parliament has in fact done.
KIRBY J: That is really weasel language, Mr Gageler.
MR GAGELER: No, not at all, your Honour.
The answer to your Honour’s question is yes, but how I am going to
use it I would rather leave
for a moment. At page 1214 under the heading
at line 35, “Consistency of information between the Appropriation
Bills, Portfolio
Budget Statements and Annual Reports”, it is
said:
An important change under the accrual budget will be the provision of consistent information in the Appropriation Bills, Portfolio Budget Statements (PBS) and Annual Reports, as all the documents will be presented on an outcomes basis. The lack of linkages between the Bills, PBS and Annual Reports has long been a concern to Parliament. Agency Portfolio Budget Statements (which will be available on Budget night) will contain detailed information on planned performance of outputs and outcomes on the same outcomes basis as the bills . . .
Not only will Senators and Members be able to make more informed assessments of the merits of appropriation bills using agency PBS, they will be able to assess actual versus planned performance –
Those are important words. It is not the only place that one
finds those words in what has been told to the Senate, and I will come
back to
that. But at page 1215 the implications for the 1965 Compact are addressed
and it said:
The 1965 compact between the Senate and the Executive Government established the basis of the allocation of expenditure between Appropriation Bills 1 and 2.
Bill 1 represents the instrument for appropriations that are not amendable by the Senate and covers expenditure for the ‘ordinary annual services’ of Government . . .
Bill 2 represents the instrument for appropriations that are subject to amendment by the Senate and includes expenditure on -
a number of things. Your Honours, will note the last dot
point:
New policies not previously authorised by special legislation.
Then there is a heading, “The Compact in an Accrual Budget”:
Under the proposed accrual budget, the allocation of items between Appropriation Bills 1 and 2 would be largely unchanged:
Bill 1 would continue to appropriate revenue for ‘the ordinary annual services of government’.
Bill 2 would appropriate for capital funding, Section 96 Grants to the States and new policy for new outcomes not previously approved by Parliament or authorised by special legislation.
However, minor modifications are needed in three areas to give full effect to accrual budgeting -
and the second one I think is the only relevant one:
new administered expenses that fall within an existing outcome included in Bill 1 -
Now, that was considered. That proposal was considered by the Senate Standing Committee on appropriations and staffing.
HAYNE J: Just before you go on, line 33 or so says a little more about new administered expenses. Do we need to understand that?
MR GAGELER: Yes.
HAYNE J: In particular, what is meant by
saying:
This is on the basis that the outcome has been previously approved by Parliament?
MR GAGELER: We may need to explore that, your Honour, yes.
HAYNE J: Yes, at first blush it seems to suggest if the outcome has been previously stated, new means of achieving that outcome will fall within Bill 1.
MR GAGELER: Yes.
HAYNE J: But that is an apparent view - - -
MR GAGELER: That is a possible view, your Honour.
HAYNE J: - - - you need to explore at some point.
MR GAGELER: Yes, I appreciate that, your Honour. It is not, I think, a view that has been put against us, but I understand it and will address it. That was considered, as I - - -
KIRBY J: Is that not consistent with your argument? It is not against you?
MR GAGELER: It is certainly not against me, no. Not against me at all.
KIRBY J: It is saying if Parliament has specifically approved an outcome and it is within an outcome, then no problem. But if it has not specifically approved it, you are back to the Compact and new policies not previously authorised by special legislation have to go into Bill No 2, which the Senate can amend.
MR GAGELER: Yes, certainly whatever was meant by that was not meant to – well, we would say, your Honour – was not meant to contradict the basic element of the 1965 Compact that new policies not previously authorised by special legislation were to be included in Bill No 2.
At page 1517 your Honours will see the proposal
contained in that letter was considered by the appropriate Senate committee.
The
Minister’s proposal was summarised about lines 25 through to 30
as creating those minimal changes to the Compact, particularly
number
(ii):
all appropriation items for continuing activities for which appropriations have been made in the past be regarded as part of ordinary annual services -
In answer to your Honour Justice Hayne’s
question, that is the way that the Senate at least interpreted the proposal that
your
Honour has drawn my attention to. Then it is said at
line 36:
The committee considers that no objections to these changes arise from the constitutional provisions or from the terms of the compact of 1965.
KIRBY J: The trouble is that if you have the outcomes approach, then who is to say that it is not within the continuing activities of that outcome to build a better and stronger Australia, to have a better and greater defence capability, to meet every conceivable problem of terrorism in this country? I mean, it is difficult to see how the scheme of the Constitution works, particularly relevant to the powers of the Senate, if you have such vague, hortatory statements of outcomes.
MR GAGELER: Your Honour, we say that the statement of the outcomes – this is to give a more precise answer to one of your Honour’s earlier questions – if the outcome statements were left as the totality of the description of purpose, then that would be insufficient to meet the constitutional requirement of section 81, but we say that the appropriation legislation does not leave us only with the description of the outcome. The outcome properly construed for the purposes of section 81 is simply a label expressed in terms of an aspiration but simply a label for the outputs which are then detailed in the portfolio budget statements and they are the subject of detailed scrutiny in the Senate, but I will come to that.
GLEESON CJ: What is the relevance of the concept of what are described as “performance indicators for outcomes” referred to on the top of page 1215?
MR GAGELER: I will take your Honour to that in due course. I will show your Honour the relevant performance indicator for the outcomes and outputs in question. I will be using it as an aid to construction as to what must have been encompassed within the outputs.
GLEESON CJ: But this concept of performance indicators is relevant to the wider concept of outcome appropriation, is it not?
MR GAGELER: Yes. What is being said at pages 1214 to 1215 is, “Look, this is a great new system. Not only are you going to be given more information at the time of making your decision as to whether or not to grant an appropriation, but you are going to be given more information later on so that you can track the expenditure of money against the grant that you have made by reference to performance indicators”. Your Honour may appreciate, key performance indicators, that sort of jargon is often used in accounting circles, but I will take your Honours to an example.
CALLINAN J: Mr Gageler, I know why you are taking us to all of this, to help us try to understand it, but in the end we just have to construe the words. What a very senior Minister in the government or the president of the Senate or anybody else thought the words meant does not really assist me, I must say.
MR GAGELER: Yes to the first part of what your Honour says. As to the second, I hope to persuade your Honour otherwise.
CALLINAN J: But it cannot be an aid to construction, can it, Mr Gageler?
MR GAGELER: Yes, it can, your Honour.
CALLINAN J: What is its status? What is the president’s response? What is the status of that as an aid to construction in correspondence?
MR GAGELER: What it does, your Honour, is demonstrate a parliamentary practice, parliamentary understanding, that forms part of the context within which your Honours have to interpret what Parliament has done. There are some more direct aids to construction. I found it better to take your Honours to the context at this stage.
CALLINAN J: I am not being critical; I am just raising what I see as a problem.
MR GAGELER: I will come to it in due course and I think it may be solved when I take your Honours to Brown v West, where parliamentary practice was relied upon extensively by the Court in interpreting an Appropriation Act.
McHUGH J: Is what you are saying that the meaning of the words were a different complexion when understood against the background of Parliamentary practice?
MR GAGELER: Yes, your Honour.
KIRBY J: Does the Acts Interpretation Act help here? I think you rely on it.
MR GAGELER: In respect of the Compact of 1965, no, but in respect of the portfolio budget statements yes, and I will come to that.
GUMMOW J: Why? I thought the legal norm was section 83 of the Constitution.
MR GAGELER: We would move beyond that, your Honour.
GUMMOW J: I see.
MR GAGELER: We would move to the question of the background to the construction of the appropriation legislation; that background lying in Parliamentary practice, and your Honours have to construe what Parliament has done.
McHUGH J: Well, the Appropriation (Parliamentary Departments) Act provides that the portfolio budget statements are relevant documents for the purpose of section 15AB of the Acts Interpretation Act.
MR GAGELER: Yes. I will come to that – as does Appropriation Act (No 1) more critically, but I will come to that in a moment, your Honour. Can I just go to one further highly pertinent explanation of contemporary parliamentary practice? Your Honours find that in Budget Paper (No 4), which was tabled in Parliament with the Bill for the Appropriation Act in question. Your Honours find that in volume 2 of the case stated book. It begins at page 355, right at the beginning of volume 2. So this is a document that your Honours will see from 355, which was circulated with the budget, that is with the introduction of the Appropriation Bill (No 1) and Appropriation Bill (No 2).
Your Honours will see at page 357 it contains an introduction, to which I will come, but it also contains – this is as part of Budget Paper (No 4) - it contained the Appropriation (Parliamentary Departments) Bill and Appropriation Bill (No 1) and Appropriation Bill (No 2) and then a table on agency resourcing that your Honours will see if you just flick a little further through the volume. The table on agency resourcing went agency by agency and accumulated the appropriations from Appropriation Bill (No 1) and Appropriation Bill (No 2) and other sources.
It is the introduction to which I wanted to take
your Honours. This certainly is a document that falls within section 15AB
of the
Acts Interpretation Act in the sense that it was tabled in
Parliament on the occasion of the Bill in question being introduced. At page
362 your Honours
see a fairly useful overall introduction to the
appropriation system. At page 363 your Honours see, about line 30, a
reference to
the:
Compact of 1965 . . . (as altered in 1999 for the introduction of accrual budgeting) determines the allocation of items between the annual appropriation bills.
Then one sees a description of those Bills, “Appropriation
Bill (No 1)” at page 365, the heading about line 19, and
“Appropriation
Bill (No 2)” over the page. I do not want to go
through the detail of that, but may I go to what is said at page 364. This
is
in the general introduction about appropriations. Line 21:
The annual appropriation bills, portfolio budget statements and agency annual reports are an integrated package showing the allocation of resources to government outcomes by agencies. The portfolio budget statements –
this is again another important statement –
contain details of the estimated payments under each of the annual appropriation bills and legislation containing special appropriations. They also contain details of estimated receipts from all sources . . . Finally, the appropriation bills declare portfolio budget statements to be relevant documents for statutory interpretation. They can be referred to if issues arise over how to interpret the associated annual appropriation acts.
This is another very important statement.
The portfolio budget statements are prepared by portfolio ministers for the purposes of Senate Legislation Committees’ examination of the Government’s budget. The statements are published as Budget Related Papers and tabled in the Parliament at budget time.
We are told that more information is available on the Department of Finance website and your Honours have what is called a download from the Department of Finance website – may I take your Honours to that. What is said at that website is relevantly at page 5 of 6 - these are numbered at the top. There is a heading in the middle of the page, “Presentation of the Appropriation Bills, Portfolio Budget Statements and Annual Reports”:
The Appropriation Bills, Portfolio Budget Statements . . . and Annual Reports are an integrated package used to inform Senators and Members of the proposed allocation of resources to Government outcomes by agencies.
Agency PBSs (which are released on Budget night) contain detailed information on planned performance of outputs and outcomes on the same basis as the Bills. Additionally, information on actual performance will be published on an outcomes basis in agencies annual reports, enabling a clear read between the Bills, PBS’s and Annual Reports.
Your Honours have also from the same website and related to it another two-page - - -
KIRBY J: Would you interpret that jargon, “enabling a clear read between the Bills, PBS’s and Annual Reports”?
McHUGH J: Comparison it means, does it not?
MR GAGELER: It is probably computer speak,
yes, I think comparison. Your Honours, there is another explanation of
portfolio budget statements
at the same website. That is the second two-page
document and this is significant. What is said on the first page is:
Portfolio Budget Statements (PBSs) inform Senators, Members and the public of the proposed allocation of resources to Government outcomes. The PBS provides an important means by which the Executive Government remains accountable to the Parliament.
The PBS also assists in the interpretation of the appropriations; there is an interpretation provision in the Appropriation Acts, which will require the PBS to be taken into account when interpreting the items in the Appropriation Acts . . .
Principles Underlying the PBS
The PBS should provide sufficient information, explanation and justification to enable Parliament to understand the purpose of each item proposed in the Appropriation Bills (Nos 1 and 2) and Appropriation (Parliamentary Departments) Bill. It should translate the information in the Bills into the related outcomes and outputs.
HAYNE J: Where does this imperative language come from? “Should” as a matter of law, “should” as a matter of good departmental practice, “should” because it looks good on a website to which the public has access, what?
MR GAGELER: The second, the third leading to the first.
HAYNE J: And are these PBSs documents that are taken into account by the Auditor-General in performing the audit function?
MR GAGELER: Yes, ex post.
HAYNE J: And do we come to the legislative way in which that is required?
MR GAGELER: I was not going to take your Honour to that, I can but it is ex post.
HAYNE J: I understand that but at some point I would have wished to know whether there is a legislative recognition of the PBS at the audit end of the process.
MR GAGELER: The short answer is, yes, because the Auditor-General is interpreting and applying the law.
HAYNE J: I would like a much more detailed and, if I may say so, precise answer than that and at some later time is probably the more convenient.
McHUGH J: And so would I, Mr Gageler, because I regard this aspect that Justice Hayne has just raised with you as perhaps one of the most important aspects of understanding the importance of the PBS, because that is the final check, subject to the Federal Court’s rights or powers in respect of it. It is the Audit Act’s provisions.
MR GAGELER: Absolutely.
HAYNE J: That is the parliamentary supervision bite to it, is it not, that what the auditor does represents an important step in parliamentary supervision, does it not?
MR GAGELER: Yes, ex post.
GUMMOW J: You keep saying ex post, but - - -
MR GAGELER: Well after the event, in practice.
McHUGH J: Yes, I know, but the point is that by knowing what the auditor has to do gives you some idea - maybe the cardinal idea as to what part the PBS play in interpreting the appropriation.
MR GAGELER: Yes. Your Honours, I will attempt to do that.
GUMMOW J: One question is, to what extent is the judicial power engaged before the audit function is finished which is why I raised the Auckland Harbour Board situation with you.
MR GAGELER: Yes. Your Honour, if I need to address that I will. It is certainly not a question that has been raised by our learned friends in their otherwise fulsome defence.
HAYNE J: You ought to look up what “fulsome” used to mean, Mr Gageler, or perhaps your opponent should, and take that on board.
MR GAGELER: I hope I was using it in its modern sense, your Honour, not knowing what it used to mean.
HAYNE J: Sickeningly cloy was I think the sort of notion it had.
MR GAGELER: I will not go back to that.
CALLINAN J: Mr Gageler, I am sorry to come back to this, I just want to know the exact status of Budget Paper No 4 which begins at page 355 and you have been reading from it. It no doubt does fall within one of the descriptions in 15AB(2) of the - - -
MR GAGELER: Yes, of the Acts Interpretation Act?
CALLINAN J: Yes, but it was just which one so I could get its exact status.
MR GAGELER: Yes. It would
fall within section 15AB(1) and it would fall within 15AB(2)(e):
any other relevant document, that was laid before, or furnished to the members of, either House - - -
CALLINAN J: Yes. It seems to be at least that.
MR GAGELER: Yes.
CALLINAN J: Is it anything more than that? Is it a document that is actually referred to in the Appropriation Act?
MR GAGELER: This one, no, but the portfolio
budget statements, yes, and they fall within 15AB(2)(g), that is:
any document . . . that is declared by the Act to be a relevant document –
I will take your Honours to that.
CALLINAN J: Thank you.
MR GAGELER: The other aspect of Budget Paper
No 4 that I wanted to refer your Honours to is that which deals with
the structure of appropriations.
That is at the bottom of page 364 and the
top of page 365. At the top of page 365 what is said is:
In accordance with the Constitution, appropriations are provided for particular purposes. For all expenses appropriations, those purposes are the outcomes which are shown beside the appropriation amounts. Outcomes are the results or impacts on the community or the environment that the Government intends to achieve. They are specified by the responsible portfolio minister with the endorsement of the Finance Minister.
Further information on outcomes and on the outcomes and outputs framework more general is available at –
another government website. Your Honours have in PDF form what is available at that other government website. It is called “The Outcomes & Outputs Framework Guidance Document - November 2000”. I am afraid Justice Hayne is not going to find anything precise in this document, but we need to grapple with it.
HAYNE J: Past
tense, Mr Gageler, did not.
MR GAGELER: At page 3 it
said in the second paragraph:
This guide takes the outcomes and outputs framework, first introduced in the 1999 Federal Budget, to the next level of development. It is aimed at practitioners within Commonwealth departments and agencies who have specific questions or issues about the framework and its application.
And the next page, page 4, after a diagram that I will not - - -
KIRBY J: So this is aimed at this hypothetical officer that the Commonwealth submission refers to?
MR GAGELER: Well, perhaps, perhaps. After a - - -
KIRBY J: At last I found who it is.
MR GAGELER: Well, it may be somebody who can make sense of the diagram on page 4, your Honour.
GLEESON CJ: Are those outcome indicators the same thing as performance indicators?
MR
GAGELER: I think so, your Honour. What is said after the table
is:
In other words, government delivers benefits to the Australian community (outcomes) primarily through administered items and agencies’ goods and services (outputs) which are delivered against specific performance benchmarks or targets (indicators).
McHUGH J: Well, that is pretty clear.
MR GAGELER: So far so good.
KIRBY J: This case is about 21st century spin meets 19th century Constitution.
MR GAGELER: Yes.
GLEESON CJ: Well, I notice that we are in there under the heading “Equitable and Accessible System of Federal Justice”.
MR GAGELER: It would be interesting to know what your Honours’ performance indicators are.
GLEESON CJ: Maybe we have been invited to provide them and have declined.
MR GAGELER: It then says:
All Commonwealth agencies are required to report on the basis of an outcomes and outputs framework.
Now, here we have it, page 5:
The framework & how it works
The outcomes and outputs framework is intended to be dynamic and flexible. It works as a decision hierarchy:
• government (through its ministers and with the assistance of relevant agencies) specifies the outcomes it is seeking to achieve in a given area;
• these outcomes are specified in terms of the impact government is aiming to have on some aspect of society . . .
• Parliament appropriates funds to allow the government to achieve these outcomes through administered items and departmental outputs;
I will not read the next three dot
points, except the last one, your Honours note, is performance indicators,
and then it says:
Outcomes, administered items and outputs form the basis of the Commonwealth’s budgetary framework and documentation. Outcome statements define the purpose of appropriations in the Budget Bills, while administered items and departmental outputs are detailed in Portfolio Budget Statements, which form part of the Budget Papers.
Now, that is jargonistic, but what it is saying, in our respectful submission, and what ought emerge as a proper interpretation of what Parliament in fact does is that a Parliament appropriates funds for the purpose of achieving outcomes specified in the Appropriation Acts through the departmental outputs detailed in the portfolio budget statements. That is as we understand the system. That is as we understand how the system works. Your Honours, with that lengthy explanation of the - - -
HAYNE J: This document you have given us is a November 2000 document.
MR GAGELER: Yes.
HAYNE J: Are we entitled, required, obliged to know what has since happened with specifying outcomes in the Department of Finance and Administration?
MR GAGELER: If your Honour goes to page 365 of volume 2 of the special case book, within Budget Paper (No 4) laid before both Houses on 10 May 2005, line 15, there is a website address. If your Honour clicks on that website address that is what you get.
HAYNE J: Yes.
KIRBY J: It has not been updated since November 2000. If read today, the website would be the document we have.
MR GAGELER: I got this yesterday.
HAYNE J: You can get that document at that website, yes.
MR GAGELER: Yes.
HAYNE J: But things have moved also.
MR GAGELER: Well, if they have then Parliament has not been told about them.
HAYNE J: Yes, I see.
MR GAGELER: Appropriation Act (No 1). May I come to that now? Your Honours have it in our legal materials behind tab 1.
KIRBY J: The immediate response to your last statement is if Parliament has not been told the truth, then it is for Parliament to jump up and down and make a fuss about it and to insist upon the truth, but unless this has some legal status it is doubtful that we can do much about demanding that Parliament get the truth.
MR GAGELER: No, all I am asking your Honour to do is to note the context in which the legislation that I am about to take your Honours sits. Part of that context, an incredibly important part of that context, is the Parliamentary process by which the legislation comes into existence, including – this is why I started with section 56 of the Constitution. It starts with a request, with the Executive coming to the Parliament and saying, “I need this money for this purpose.” It then goes - - -
HAYNE J: Well, do we have the text of the request that lies behind Appropriation Act (No 1) 2005-2006?
MR GAGELER: We will provide - your Honours have not been provided with it but we will provide it.
HAYNE J: Yes.
MR GAGELER: It is in the standard form, but we will provide it to you - the standard form that I have taken you to in Harris.
CALLINAN J: Mr Gageler, I see in that document
“The Outcomes & Outputs Framework Guidance Document November
2000” at page 10,
“Policy & purpose” and after the last
dot point:
All departmental outputs must contribute – directly or indirectly – to the realisation of a specified outcome - - -
MR GAGELER: Yes.
CALLINAN J: And then it refers to the “broad goals of government and its agencies”.
MR GAGELER: Yes.
CALLINAN J: I notice incidentally it also refers to the necessity to obtain legal advice.
MR GAGELER: Yes, good idea.
CALLINAN J: Can we look at this document as an aid to construction?
MR GAGELER: Absolutely, yes. Whether it quite falls within section 15AB(2)(e) when it is the document that is simply referred to in the document laid before the House I am not sure, but it certainly falls within 15AB(1). In any event, it is part of the context that your Honours can have regard to in accordance with general principles construction, laid out for example in CIC Insurance 187 CLR 384 at 408 and also in Brown v West, to which I will come.
Appropriation Act (No 1), your Honours. Section 3 - your Honours might note first the long title, and then go to section 3 which contains a number of definitions, relevantly “Agency”, your Honours have mentioned.
GUMMOW J: Agent of whom?
MR GAGELER:
It could mean entity or notional entity. It is just the same term that is used
in the Financial Management and Accountability Act. As for
your Honour’s – agent of the people perhaps.
“[D]epartmental item”, I will come back to that,
“expenditure”
and “Portfolio Budget Statements” -
“departmental item”, your Honours will see, is defined to
mean:
the total amount set out in Schedule 1 in relation to an entity under the heading “Departmental Outputs”.
If your Honours go to page 79 if you are using the plaintiff’s legal materials numbering, or page 76 if your Honours are using the folio print, you will see the relevant part of Schedule 1. Applying the definition of “departmental item”, the departmental item is the total amount for the Department of Employment and Workplace Relations that one sees at the foot of the column headed “Departmental Outputs”.
GLEESON CJ: In terms of, as it were, manner or style or breadth of description, it corresponds to what we find on page 36 about ourselves?
MR GAGELER: Yes.
GLEESON CJ: Or what we find on page 22 under the heading “Outcome 1” about the Attorney-General.
MR GAGELER: Yes, that is right. There is a standard format as notified to the Senate in that letter to which I have taken your Honours in 1999 and what it shows is columns of figures for departmental outputs which add up to the departmental item and it shows rows of outcomes, sometimes one outcome. In the case in question at page 76, three different outcomes which we will be saying is properly interpreted as a label for the departmental outputs that are designed to achieve that outcome and that are detailed in the portfolio budget statements.
GLEESON CJ: Where do you find the performance indicators?
MR GAGELER: You will see that in the portfolio
budget statements but I will come back to that. If I can take your Honours
to section 7, section 6 is just a summary of all basic appropriations
in Schedule 1, and then section 7 is the basic appropriation of
departmental items.
What it says in subsection (1) is:
For a departmental item for an entity, the Finance Minister may issue out of the Consolidated Revenue Fund amounts that do not exceed, in total, the amount specified in the item.
So that is amounts not exceeding in total the bottom line that
your Honours have seen for departmental outputs at page 76. Then it
says:
(2) An amount issued out of the Consolidated Revenue Fund for a departmental item for an entity may only be applied for the departmental expenditure of the entity.
GLEESON CJ: Does this means you can move
between outcomes 1, 2 and 3?
MR GAGELER: It does mean that. Can I come back to your Honour’s question in just a moment? Departmental expenditure is not defined. It must in context simply mean expenditure on departmental items which, again, in context means expenditure on or for the purpose of departmental outputs.
GLEESON CJ: But does section 7(1) attach itself relevantly to the figure of $4 billion rather than to the figures of $3 billion or $230,000?
MR GAGELER:
Exactly. That is made clear, to be more precise in my answer to
your Honour, if you look at the note to the definition of
“departmental
item”. There is a note to that definition at the top
of page 3 of the print. What the note says is that:
The amounts set out opposite outcomes, under the heading “Departmental Outputs”, are “notional”. They are not part of the item, and do not in any way restrict the scope of the expenditure authorised by the item.
So what we read that as saying is that the whole of the bottom line of the departmental item is available to be spent on all or any departmental outputs. That is the way we read it, your Honour.
McHUGH J: Mr Gageler, how closely do you
have to read these outcomes? Take this Court itself on page 39. There is
only one outcome. It
is:
To interpret and uphold the Australian Constitution and perform the functions of the ultimate appellate Court in Australia
Does that mean we cannot spend a cent on sittings in the original jurisdiction of this Court?
MR GAGELER: No. That illustrates, your Honour, the nonsense of treating these outcomes as a full description, even a partial description, of - - -
GLEESON CJ: It is Parliament’s description.
MR GAGELER: It is Parliament’s label, your Honour, for what is spelt out more fully in the portfolio budget statements. That is the point I am coming to. If your Honours look, for example – and we have been doing this – “Higher productivity, higher pay workplaces”, that is the description that we are currently concerned with at page 64, but your Honours could almost pick some at random, and your Honours have already referred to some. Look at page 41, “ATTORNEY-GENERAL’S PORTFOLIO”, the outcome is “Parliamentary democracy and an effective statute book”.
GLEESON CJ: But if Parliament chooses to describe the outcome relevant to the Attorney-General’s portfolio as “An equitable and accessible system of federal civil justice”, then it has chosen to express itself in very general terms. What follows from that?
MR GAGELER: Nothing, except that some of the terms are so general as to defy the description of a legal standard or a legal criterion.
GLEESON CJ: But they are Parliament’s terms.
MR GAGELER: They are Parliament’s terms.
GLEESON CJ: The Act of Parliament is not void for uncertainty.
MR GAGELER: What I am trying to get to is that in interpreting them Parliament has told us we go to the portfolio budget statements.
HAYNE J: Well, just before we do, if we can stay for a moment at the level of generality. Assume an appropriation in 1942 for the purpose of prosecuting effectively the current war. Do you say that would be a valid appropriation?
MR GAGELER: Yes.
HAYNE J: If entirely unamplified by any supporting document?
MR GAGELER: Yes.
HAYNE J: Simply X billion pounds, in those days, for the effective prosecution of the current war.
MR GAGELER: Yes.
McHUGH J: I think in the Pharmaceutical Benefits Case Sir John Latham set out some of the items in previous years. They included such items just simply as medical research I think.
MR GAGELER: Yes, but the point is you can look at the activity that the money is being spent on and say, “Is that medical research or isn’t it?” You can look at the activity the money is being spent on and ask, “Is it for the purpose of prosecuting the war or not?” I mean, they are broad but they are ascertainable criteria.
HAYNE J: Are they? Take the medical research thing. There would be some alternative therapies which might provoke great debate about whether this was medical research or not.
MR GAGELER: There will be questions at the margins, yes, but when one comes to a parliamentary democracy and an effective statute book or, page 52, “Enhanced cultural identity”, where do you start? Now, the point is, your Honours - - -
GUMMOW J: You use the word “statute”, but these are peculiar statutes, as we know. It is a permission, if you like, given by the legislature to the Executive to dip its hand into the revenue. Not a requirement, a permission.
MR GAGELER: Yes, that is right, exactly. Your Honours, what we wanted to say about these broad descriptions is that if you look at any of the descriptions really they have three common characteristics. One is that they occur within a table, that is they occur within a structured table, which has them, we say, purporting to designate a group of departmental outputs. They are not presented as freestanding or unqualified descriptions of purpose. They refer to a group of outputs and it is the total of the outputs that are the departmental item. That is the first thing we say about the construction. The second, we say, is that they at least purport to be objectively expressed, that is they are not stated to turn on anyone’s opinion or state of satisfaction, reasonable or otherwise.
GLEESON CJ: “An equitable and accessible system of federal civil justice” does not turn on anybody’s opinion?
MR GAGELER: All I am saying is, in the way in which
they are expressed, they purport to be objectively expressed. The third thing
that we wanted
to say is if they have any meaning at all then generally the
meaning is one of inherent obscurity. It is in that context, in our
respectful
submission, the descriptions of outcomes ought be interpreted as being nothing
more than a label for a group of outputs
for which a dollar figure is assigned
and on which the money appropriated is authorised to be spent, that is, is a
group of outputs
which together contribute to the goal or the aspiration that is
captured in the outcome. So that to give meaning or content to the
label, which
is simply the label for a group of outputs, one has to go to the portfolio
budget statements, and that we understand
to be the purpose of section 4 of
the Act. If your Honours go to section 4(1), it says that:
The Portfolio Budget Statements are hereby declared to be relevant documents for the purposes of section 15AB of the Acts Interpretation Act 1901.
If your Honours have section 15AB, that invokes
section 15AB(2)(g), which takes you back to section 15AB(1).
Section 15AB(1) says that:
in the interpretation of a provision of an Act, if any material –
relevantly of the kind referred to in
section 15AB(2)(g) –
is capable of assisting in the ascertainment of the meaning of the provision . . .
(b) to determine the meaning of the provision when:
(i) the provision is ambiguous or obscure –
In our submission, what
section 4(1) is saying in quite ambiguous terms is you look to the
portfolio budget statements to determine the meaning of an outcome and
specifically
to determine the outputs for activities that are encompassed within
the description of the outcome.
GUMMOW J: Is that any more than what section 4(2) is doing?
MR GAGELER: We see section 4(2) as simply consequential upon section 4(1), that is, it spells out the consequences of the meaning fixed by the portfolio budget statements. Our learned friends say it is a provision that allows you to read up by reference to the portfolio budget statements what might not otherwise be encompassed within the broad words of an outcome, but not to read down, and we say that is - - -
GUMMOW J: It is not quite a deeming provision on their theory but it is approaching it.
MR GAGELER: No, approaching it. We say, your Honour, that that is just a misreading of subsection (2). It is a positive statement, subsection (2), but it has a negative corollary. Our learned friends’ construction ignores subsection (1) entirely. It ignores almost everything that Parliament, particularly the Senate, has been told about the use of the portfolio budget statements. It ignores elaborate terminology in the portfolio budget statements themselves – and I am going to go to the relevant one in just a moment – and it, frankly, undermines almost entirely any sense of parliamentary control over the purpose for which an appropriation is made.
HAYNE J: Do you read the Act as a whole, but 4 in particular, with the meaning that – using the words of 4(2) as the base for this proposition, you read it as saying “the Portfolio Budget Statements indicate the activities that are intended to be treated as activities in respect of a particular outcome”?
MR GAGELER: Your Honour, that is a good way of putting our proposition, yes.
HAYNE J: It is then rather odd that you get this conditional proposition in (2) if the meaning to be ascribed to it is “the Portfolio Budget Statements indicate the activities that are intended to be treated as activities in respect of a particular outcome”. That is the nub of your case, is it not?
MR GAGELER: Not at all, your Honour. That would be to allow the tail to wag the dog. Part of the nub of our case, one knuckle on the fist, is section 4(1) which is concerned about fixing the meaning, ascertaining the meaning.
HAYNE J: I understand you take the steps to get there, but the destination to which you seek to come is the one I described, is it not?
MR GAGELER: Yes, and the destination, if I can put it in my own words, your Honour, is if a portfolio budget statement, fairly and sensibly read, indicates expressly or by implication that an activity or output is to be treated as contributing to an outcome, then it is encompassed within the appropriation. That is what we say. We are not taking any narrow or pedantic view. We are taking a sensible, practical view, the sort of view that a Senate Estimates Committee or House of Representatives committee is entitled to take at the time of considering whether or not to make the grant that has been requested by the Executive in accordance with section 56 of the Constitution.
GUMMOW J: What is the significance of section 7(2)?
MR GAGELER: Well, I mentioned this before, your Honour. If a statutory limitation were needed, it limits the Executive to the expenditure of funds only on departmental outputs as identified in the Appropriation Act with the aid of the portfolio budget statements.
McHUGH J: What do the Appropriation (Parliamentary Departments) Acts do? Do they provide for the acquisition of new assets? Are they, in effect, the - - -
MR GAGELER: No, sorry, your Honour, I think that they are Acts that just treat the parliamentary departments as separate subjects of appropriation, by a very long tradition I am told by Mr Kirk.
McHUGH J: They contain a clause similar to section 4.
MR GAGELER: Yes, as does Appropriation Act (No 2).
GUMMOW J: Does section 7(2) of the Appropriation Act have a connection with section 26 of the Financial Management Act?
MR GAGELER: Probably more directly section 27 because section 26 hinges off whether or not you have a valid drawing right. It tells you, if section 27(5) did not already tell you, that you only have a valid drawing right if it falls within the terms of an appropriation.
GUMMOW J: No. It says “may only be applied”. It is a sanction, it is an imperfect obligation at the moment, 7(2). What makes it an obligation that is enforced by anything other than section 26?
MR GAGELER: Section 83 of the Constitution itself and section 27, your Honour, particularly subsection (5).
Now, your Honours, can I go to the relevant
portfolio budget statement. Your Honours have it in two forms, the form in
which I had
it until a minute ago, volume 2 of the special case book beginning
at page 673, and now your Honours also have it in a pamphlet form.
At
page 675 – if your Honours are looking at the pamphlet
version, an unnumbered page – is a letter from the second
defendant
to the President of the Senate and the Speaker of the House of Representatives,
right at the beginning. It is a submission
of the portfolio budget statements.
Your Honours might note what is said at line 40:
I present these statements by virtue of my Ministerial responsibility for accountability to the Parliament and, through it, the public.
There is at page ix, page 679 in volume 2, a user guide. It
says:
The purpose of the 2005-06 Portfolio Budget Statements (PB Statements) is to inform Senators and Members of Parliament of the proposed allocation of resources to government outcomes by agencies within the portfolio. Agencies receive resources from the annual appropriation bills, special appropriations, standing appropriations . . .
A key role –
this again is very important –
of the PB Statements is to facilitate the understanding of proposed annual appropriations in Appropriation Bills No 1 and No 2 2005-06 . . . In this sense the PB Statements are officially Budget Related Papers and are declared by the Appropriation Bills to be ‘relevant documents’ to the interpretation of the Bills according to section 15AB of the Acts Interpretation Act 1901.
The PB Statements provide sufficient information, explanation and justification to enable Parliament to understand the purpose of each outcome proposed in the bills.
GLEESON CJ: You see an example of some
performance indicators on page 185 and following of this PBS.
MR
GAGELER: Yes. At page x your Honours see a description of how
to read the PBS. There is, about line 30, “Section 2: Agency
resources”:
A reconciliation of agency resourcing information from the 2004-05 Additional Estimates to the 2005-06 Budget. Includes key changes to the agency’s estimates and a table of appropriations and other revenue sources for both administered and departmental appropriations.
Then
“Section 3: Agency outcomes”:
A brief description of the agency’s outcomes and, where applicable, Budget measures in summary form. Details the contribution of the agency’s outputs to the outcome, performance information for the outcome, outputs and administered items, and planned evaluations.
Now, if we go
immediately to Section 3, although I will come back to Section 2, that
begins at page 714 in the case stated book, page 32 in the pamphlet,
and says:
This section explains how the resources identified in Section 2 will be used to deliver outputs and administered items to contribute to the three outcomes for the Department of Employment and Workplace Relations.
There is then at page 728, page 46 of
the pamphlet, a verbal description of outcome 2. It is said at
line 15:
Outcome 2 activities are directed towards encouraging employer and employees to adopt flexible and modern workplace relations practices. This enables workplaces to be productive and competitive and to offer employees secure jobs that are well paid.
. . . The department actively contributes to outcome 2 by:
• providing policy advice and legislation development services to government; and
• supporting employers and employees in adopting fair and flexible workplace relations practices.
Key priorities for 2005-06
Key priorities for outcome 2 for 2005-06 are to:
• develop a workplace reform package which implements the Government’s policy agenda;
Then the next
page:
Outcome 2 resourcing
Table 3.1.2 shows how the 2005-06 Budget appropriations translate –
note the word “translate”
–
to total resourcing for outcome 2, including administered expenses, revenue . . . and the total price of outputs.
GLEESON CJ: Could I take you to page 51 of the pamphlet?
MR GAGELER: Your Honour certainly can, yes.
GLEESON CJ: The first performance indicator for the higher
pay, et cetera, outcome is expressed as follows:
The federal workplace relations system supports choice of agreement with higher pay, higher productivity outcomes.
MR GAGELER: Yes.
GLEESON CJ: What does that mean?
MR GAGELER: It does not mean very much,
your Honour. It means more if you drill down to look at the performance
indicators for the actual
things that are being paid for. That is, if you look
at:
Output group 2.1 . . .
Output 2.1.1
Workplace relations policy advice
Then there is a quality level that at least can be translated into something that has meaning.
KIRBY J: It does not tell you much, does it? The quality has to be “Effective or above”.
MR GAGELER: Yes, you have to get a satisfactory report card from the Minister.
GLEESON CJ: Is that a suitable time, Mr Gageler?
MR GAGELER: Yes, your Honour.
GLEESON CJ: We will resume at 2.15.
AT 12.45 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.15 PM:
GLEESON CJ: Yes, Mr Gageler.
MR GAGELER: Your Honours, in terms of timing, it seems apparent that we will not finish today.
GLEESON CJ: Well, if we drift a little bit into tomorrow, that does not matter.
MR GAGELER: Yes, I think not. Your Honours, I was within the portfolio budget statement, taking your Honours to aspects of what it says about outcome 2. Your Honours are all now reading from the pamphlet version.
KIRBY J: We had it before.
MR GAGELER: You had it before? Well, I am glad you did, your Honours. I had taken your Honours to the narrative at pages 46 and 47. At page 47 there is a reference to the table on the next page which is said to show how the budget appropriations translate to total resourcing for outcome 2. If you go then to the table, table 3.1.2, you will see a shaded column, “Budget estimate 2005-06”, and you see a total given as the “Total price from departmental outputs”. That is the figure that occurs at page 76 of Appropriation Act (No 1) and that is the figure that is defined in section 3 of Appropriation Act (No 1) as the “departmental item”.
What the table on page 48 of the portfolio budget statement does is show you the outputs, or if you like the activities, that that total figure was to be spent on. Within departmental appropriations your Honours will see that there are a couple of output groups, output group 2.1 and output group 2.2. I do not think it is suggested that output group 2.2 could have any present relevance and within output group 2.1 the outputs are stated simply as being “Workplace relations policy advice” and “Workplace relations legislation development” and figures are given for those amounts.
Those
amounts and the others there then are shown as the component outputs, if you
like, that are the total outputs that are encompassed
within the departmental
item. Our case really on one level comes down to this. On no reasonable use of
the English language is
the promotion of proposed legislation “Workplace
relations policy advice” or “Workplace relations legislation
development”.
If confirmation of that is necessary, then what is said
about the performance information for output 2 is of some significance,
and
your Honour the Chief Justice drew attention to this before lunch. At
731 there is an explanation of how the performance of
outcome 2 is going to
be measured. At the bottom of page 49, or 731, depending on which print
you are looking at, it is said:
Table 3.2.2 on page 51, lists the performance information the department will use to assess the level of its contribution to the achievement of outcome 2 during 2005-06.
If one goes to the table at 51 and looks at the performance information for the only possible relevant outputs, output 2.1.1, “Workplace relations policy advice”, that is to be measured by the “Level of satisfaction of the Minister with policy advice”, and output 2.1.2, “Workplace relations legislation development”, that is to be measured by the “Level of satisfaction of the Minister with legislation development services”. There is no element of increasing public awareness fostering public support, much less averting industrial unrest or minimising some perceived threat to productivity.
GLEESON CJ: It has nothing to do with your argument but what is the meaning of that word “administered” that is frequently repeated in this document?
MR GAGELER: Administered expenses as distinct from - - -
GLEESON CJ: Look, for example, at the top of page 51 which I think is just convenient to where you have been, “Performance indicators for administered items”. What does that expression “administered” mean?
MR GAGELER: If your Honour goes to page 221 - - -
GLEESON CJ: In the pamphlet, yes.
MR GAGELER: - - - there is a glossary and “Administered Items” are the “Expenses, revenues, assets or liabilities managed by agencies” but the agencies do not control them. They are dealt with separately in the Appropriation Act. If your Honour goes back to the same schedule in Appropriation Act (No 1) at page 76, the Employment and Workplace Relations portfolio, we have only been concentrating on departmental outputs.
GLEESON CJ: As distinct from third party outputs.
MR GAGELER: As distinct from administered expenses. They are the things that are doled out in various ways on behalf of government, as distinct from the expenses that the department incurs. They are separately appropriated. I had taken your Honours to the relevant provisions that - - -
GUMMOW J: Section 10.
MR GAGELER: - - - appropriate only the departmental items, but section 8 separately appropriates those matters. Your Honours, if some further confirmation of the absence of funding for some new communication strategy in outcome 2 is required, it can be inferred from the existence of funding for a new communication strategy under outcome 1, which is fully explained, fully budgeted and highlighted in Budget Paper No 2. To see that, if your Honours would flick back to page 36 of the portfolio budget statement, your Honours will see a verbal description of outcome 1. At about point 3 of the page there is a reference in the second sentence of the paragraph to the “Welfare to Work” policy and one of the key priorities mentioned on the next page, page 37, again at about point 3, is “To support the new ‘Welfare to Work’ policy”.
The “Welfare to Work” policy involved new expenses which were set out at some length in section 2 of the portfolio budget statement beginning at page 21, which simply refers you to the table that begins at page 22. The table that begins at page 22, table 2.2.1, is headed “Summary of Expense Measures disclosed in the 2005 Budget” and you see the “Measure” in the left-hand column, the “Outcome” in the next column, the “Output groups” identified in the next column and then the “Appropriations budget” in the next shaded column.
If your Honours look down the column
headed “Measure”, there is the first heading “Welfare to
Work” and then
there are a series of activities that are identified. The
second last one on that page, page 22, is “communication
strategy”.
Your Honours see that and for that in the 2005-2006
budget a figure of some $8.7 million is noted as a departmental output and there
is a note at the bottom of the page:
Further details of the Measures listed are published in Budget Paper No 2.
Your Honours have Budget Paper No 2 in volume 1 beginning at page 51. The Welfare to Work Reform Package is explained beginning at page 204. There is an explanation in words and at page 205 about line 20 under the heading “EMPLOYMENT AND WORKPLACE RELATIONS” the Welfare to Work Reform Package 2005 is referred to. Again your Honours will see about halfway down the dot points there the same communication strategy resulting in the expenditure of $8.7 million in 2005-2006.
CALLINAN J: Is communication strategy the same as advertising?
MR GAGELER: If your Honour looks then at page 213, precisely what the communication strategy was seen as involving is set out. Yes. The answer I think, your Honour, is yes.
KIRBY J: Which page is that?
MR GAGELER: Page 213, “Welfare to Work – communication strategy”. It seems to us that that is talking about a form of advertising.
CALLINAN J: Well, why not just say advertising?
MR GAGELER: Your Honour, I would say advertising, but - - -
CALLINAN J: I do not know whether they are synonymous. I do not know what it means.
MR GAGELER: At
page 269 – peppered throughout this, your Honour, you will see other
examples. Page 269 in another portfolio –
this is still in Budget Paper
(No 2) - you will see something else highlighted. There is a
“National Tobacco Youth Campaign”:
The Government will provide $25.0 million over four years to develop and implement a new national health promotion campaign to help reduce tobacco use among young people. The campaign will involve - - -
KIRBY J: I think the answer to Justice Callinan’s question is that communication strategy is a bigger circle - - -
MR GAGELER: That may well be right.
KIRBY J: - - - because there would be the Minister’s briefing, ministerial statement staffers, preparation of documents and so on, whereas advertising is very much narrower and specific.
MR GAGELER: That may be so, yes. Communication strategy may well encompass more than purely advertising, yes of course. The point is that here you find – but put it another way, your Honour, advertising is obviously a communication strategy, just as a matter of ordinary language, although a communication strategy may go beyond advertising, and here you have a relatively modest communication strategy involving $29 million over four years, which is explained, indeed highlighted, in the budget papers, as, for example, do you find at page 269 that a national tobacco youth campaign, and at page 271 for the “Pharmaceutical Benefits Scheme – information campaign” and at page 284, about the middle of the page, “Strengthening Cancer Care – skin cancer national awareness campaign”.
Now, they are all – and it is actually spelt out there, page 284 line 30, that that campaign “will involve advertisements on television” and in the press. So there you have it. You have proof of the negative by pointing to the positive in other cases. There are numerous examples where Parliament has been informed of and has considered and approved particular forms of advertising.
KIRBY J: Is there in the stated case book anywhere, as a contextual matter, information on the growth of federal advertising? One has an impression that over the last 15 years it has grown steadily and, indeed, considerably. Is there anything that gives an indication of that somewhere? I think there is a reference to Professor Lindell’s article.
MR GAGELER: There is an article by Professor Lindell. We have given your Honour that in our bundle of materials at tab 6. It is directed to a particularly controversial prior episode that I do not really want to address, but there are some figures there, but your Honour may be referring to some figures that have been reported in the press recently.
KIRBY J: Yes.
MR GAGELER: They are not in the special case book, and I frankly do not know where they come from. We will see if we can track those down.
KIRBY J: A website somewhere.
MR GAGELER: Probably they are on a website but whether it is an official website is another matter. Your Honours, I wanted to come to Brown v West 169 CLR 195, if I may.
KIRBY J: This is said to be completely distinguishable because of Mr Brown’s personal interest in the issue at stake in the case.
MR GAGELER: That is in relation to standing and I will deal with standing separately, your Honour.
KIRBY J: I thought the point was made more broadly.
MR GAGELER: I am not sure. The point about Brown v West is that it concerned an action by the then Shadow Attorney-General, Mr Brown, against the then Minister for Administrative Services, Mr West, and the Commonwealth – they were the defendants. What was sought in that case to restrain expenditure on postage stamps for members of Parliament, that expenditure being in excess of an amount that had been determined as the entitlement of members of Parliament by the Remuneration Tribunal. There was, in respect of the Remuneration Tribunal - - -
GLEESON CJ: Allowances for postage stamps, actually. It is not exactly the same thing.
MR GAGELER: An allowance for postage stamps. You are right, yes, and the amount of the allowance for postage stamps, your Honours will see, page 196. It was the difference between the $9,000 determined by the Remuneration Tribunal and the $30,000 that the Minister purported to dole out to members of Parliament. The amounts in question in that case, where the expenditure was found to be unlawful, can interestingly be contrasted with the amounts in issue in the present case.
But the case, your Honours, resulted in unanimous judgment in the High Court holding amongst other things, and there were other issues, that there was simply no appropriation for the additional expenditure. In the course of so holding, the Court made a number of statements of principle upon which we rely and which the Commonwealth, as we understand it, neither embraces nor challenges in its argument but simply ignores.
At
page 205, your Honours will see a relevant discussion of principle
which begins just above the quotation of sections 81 and 83 of the
Constitution. It is then said:
Subject to certain provisions in the Constitution which charge the Consolidated Revenue Fund of the Commonwealth with the payment of particular items of expenditure . . . the power of appropriation is resposed solely in the Parliament. It is by ss 81 and 83 that our Constitution assures to the people the effective control of the public purse (to adapt a phrase of Isaacs J in The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd.
GUMMOW J: Professor Saunders has
written an article rather critical of that extravagant language of Sir Isaac
Isaacs, I think.
MR GAGELER: We take issue with Professor Saunders, with respect, your Honours. We have seen it in our learned friend’s material. Interestingly, as I said, they do not challenge Brown v West and we see it as fundamental. Let me say this, your Honours, in relation to that, and it is a point that I almost made in opening. It is this, that the legal prohibition in section 83 is fundamental to the whole notion of responsible government because it requires for the Executive - - -
GUMMOW J: That I can understand.
MR GAGELER: - - - to go back to the Parliament and obtain supply. That is what makes responsible government responsible.
GUMMOW J: I know. Sir Isaac Isaacs seemed to be chattering away about representative government.
MR GAGELER: If you change “representative” to “responsible”, your Honour, it all makes sense.
GUMMOW J: All this happened in Britain a long time before there was any modern franchise, these struggles have been fought out.
MR GAGELER: Yes, of course.
GUMMOW J: People were not getting much of a look-in.
MR GAGELER: Some of the same principles exist in the United States where there is representative but not responsible government. The only point that I was just seeking to make is within our system is adapted into our Constitution the legal prohibition is pivotal really to the operation of the political system.
KIRBY J: Yes, but if you take a functional approach to the Constitution, as distinct from a formalistic one, you have to recognise that in the course of the century the expectations and activities of government have expanded enormously and that makes very acute Justice Evatt’s distinction between providing for a library and providing for particular books.
MR GAGELER: Yes, of course.
KIRBY J: It is a question of what level of detail is required by the constitutional prescription. In a sense - - -
MR GAGELER: That is part of the
question, your Honour, but here we are looking at really what has the
Parliament done in appropriating the
particular amount. There I fully embrace
exactly what your Honour has said, but also parliamentary practice and,
through section 4(1) of the Act itself, the portfolio budget statements.
Here in Brown v West at page 207, your Honours will see a
reference to sections 53 and 54 of the Constitution. There are then
extensive references to Browning, who was then the editor of what is now
Harris’ House of Representatives Practice, and your Honours
will see a reference to the Compact of 1965 referred to about point 3 of
the page, a reference to parliamentary
practice which then included the practice
of having supply Bills. One sees at the bottom of page 207 the
statement:
Historically, the need of the Executive Government to seek annual appropriations of the Consolidated Revenue Fund “for the service of the year” or “in respect of the year” has been the means, and it remains one of the critical means, by which the Parliament retains an ultimate control over the public purse strings –
There is then a continuation of a discussion of practice leading to what is said at page 208.
GUMMOW J: We now know that that two-thirds is 80 per cent.
McHUGH J: Standing appropriation.
MR GAGELER: Yes, yes, that is right. At
page 208:
An appropriation, whether annual or standing, must designate the purpose or purposes –
There is then the quotation from Sir John Latham in the
Pharmaceutical Benefits Case that I have already referred
your Honours to. There is some further discussion, all of which is
relevant and important and then
there is a quotation at the bottom of the page
from Justice Mason, as he then was, in the Australian Assistance Plan
Case. If your Honours look to the last two sentences of that
quotation, it is:
An Appropriation Act has a twofold purpose. It has a negative as well as a positive effect. Not only does it authorise the Crown to withdraw moneys from the Treasury, it ‘restrict(s) the expenditure to the particular purpose’ –
and it may well be, your Honours, that section 7 of the Appropriation Act (No 1) is structured in subsection (1) and subsection (2) to reflect that twofold purpose.
GUMMOW J: That is right, yes.
MR GAGELER: One then goes to
page 209 in the light of those statements of principle and it said, about
point 3 – well, the paragraph at
the beginning said:
The present case differs from the AAP Case in this respect: there, the Appropriation Act specified the purpose of the appropriation and the question was whether the purpose specified was a purpose of the Commonwealth; here, the appropriation in Supply Act (No 1) 1989-1990 on which the defendants rely expresses the purposes for which the money may be expended in very broad terms and the question is whether those purposes include the supplementing of the entitlement to a postage allowance determined by the Tribunal.
Your Honours see the very broad terms that were expressed.
Let me say the answer to that question was no. Their Honours got that
answer to
that question by considering the broad language both of the departmental
appropriation and of the advance to the Minister
for Finance, that you see
further down the page, in the light of parliamentary practice. What is said at
page 210 – remember
here we are dealing with a Supply
Act – about point 7:
The appropriations made by a Supply Act (No 1) are not made for any new purpose: the Supply Act, being an interim measure, is intended to maintain the status quo in the objects of government expenditure. The government’s Estimates are considered by a committee of the whole before the Appropriation Act (No 1) is passed and, being a lynch-pin of the annual budget, they are extensively debated.
Then the position of Supply Acts is contrasted. At the top of
page 211 it is noted that that unique position of Supply Acts was reflected
in a section of the Supply Act, section 3(2). Then really the relevant
conclusion is stated at the middle of page 211:
To predicate of the Supply Act (No 1) 1989-1990 that it contained an appropriation for the purpose of supplementing the postal allowance would be to find in it an appropriation for the funding of a new policy which, by parliamentary practice, would be found only in a bill for special legislation or, at the least, in Appropriation Bill (No 2).
The parliamentary practice that they can only be referring to there is the Compact of 1965 which was previously noted. It can therefore be taken that not only by reason of section 3(2) but also as a matter of parliamentary practice the Supply Act was not intended to include an appropriation for new policies and that conclusion there stated is then restated about the middle of page 212.
Your Honours, in a sense, this application – we are seeking to have your Honours do no more than apply exactly the same principles to something that is, in monetary terms, and one would think in practical terms, far more important than the postage allowance that was dealt with in Brown v West. In terms of justiciability, Brown v West itself demonstrates the existence of justiciable controversy but there are some statements concerning justiciability that your Honours may find helpful in the AAP Case [1975] HCA 52; 134 CLR 338.
As your Honours are being given that, can I
also give your Honours a reference to a pre-Federation English case. We
have mentioned
it in our written submissions at footnote 13. It is The
Queen v Lords Commissioners of the Treasury (1872) LR7 QB 387 at
396 where Lord Blackburn said:
But when the money has been voted, and the money has been granted, and an Appropriation Act has been passed, then it has become an Act of the legislature, and we must construe it when it comes before us as we should do any other Act.
It is really the sentiment there expressed that one finds in the AAP Case in the judgment of Chief Justice Barwick at page 364 in the paragraph at the bottom of that page and spelt out perhaps more pertinently for present purposes in the judgment of Justice Gibbs, as he then was, at page 379.
GUMMOW J: What about Justice Jacobs?
MR GAGELER: He did not take quite the same
view, your Honour, but it was Justice Gibbs who your Honour will
see said some things, drawing on Marbury v Madison on the Australian
Communist Party Case in terms that were picked up, your Honours will
recall, by Justice Brennan, as he then was, in Attorney-General v
Quin and frequently repeated in this Court since, particularly at
page 380 where, after the quotation from Marbury v Madison,
his Honour said:
It is our duty to give effect to ss 81 and 83 as much as to any other provision of the Constitution. The same principle requires us to pronounce on the validity of executive action when it is challenged. Indeed, some might think that the justification for the review by the courts of the constitutional validity of executive acts is even stronger than in the case of legislation.
Justice Murphy, your Honour’s might note at page 422.
KIRBY J: The Court was divided there, and it was ultimately resolved by Justice Stephen on the basis of the standing point.
MR GAGELER: Yes. Your Honours, to extract something by way of ratio from the case would be unhelpful.
KIRBY J: It would be heroic.
MR GAGELER: I simply went to it for the principle, and the statement of principle of Justice Gibbs at page 380, in our submission, is unassailable.
KIRBY J: And was that endorsed in Brown?
MR GAGELER: Implicitly. The issue was not raised in Brown. It, as I may say, ignores the issue raised by the defendants in this case, as we understand their pleading.
GLEESON CJ: What
is Justice Murphy referring to on page 422, where he says:
the Constitution does not require any particular degree of specification of the purpose. With purposes such as . . . the advance account to the Treasurer it would be highly inconvenient if it did.
What is that a reference to, the “advance account to the Treasurer”?
MR GAGELER: That is the advance to the Minister for Finance. That was in issue in Brown v West. If your Honour goes to Appropriation Act (No 1) and – it is in every Appropriation Act, or every – Appropriation Act (No 1) or Appropriation Act (No 2). If you look at section 12 of Appropriation Act (No 1), then you see the modern equivalent. It is called the “Advance to the Finance Minister” and it deals with the case of emergency expenditure. Your Honour sees that it is actually in terms directed to an urgent need for expenditure that - - -
GLEESON CJ: It refers to expenditure that was unforeseen.
MR GAGELER: Yes, the assumption being, if there was any significant expenditure that was foreseen, then it ought be spelled out, covered by, this Act. Your Honours, at the risk of repetition I will be very brief. To summarise our position, we say that the expenditure on postage stamps, dealt with in Brown v West, was expenditure in the nature of petty cash concerned with what the defendants proposed to do here.
GUMMOW J: It was said that Mr Brown had an interest in knowing whether or not he was entitled to the supplementary allowance.
MR GAGELER: I will deal with standing in a moment, but I will deal with lawfulness first. Here we have a proposal to spend a very large, at this stage undisclosed, amount of public money on promoting or selling a new and highly controversial policy that has not yet even been formulated in a Bill, let alone in legislation that has been enacted. It was a policy that was only announced after the budget was introduced - the budget on 10 May, the policy some weeks later, your Honours see it I think on 26 May, volume 2 page 905, volume 3 page 1576, where it is described as a “historic” move.
Not only is it policy, your Honours knew, but the expenditure on the promotion of the policy is, in our respectful submission, inherently controversial. Even if it had been contemplated by the defendants themselves at the time of the budget, it was simply not brought to the attention of the Parliament and cannot fairly be treated as being within the appropriation that was granted. It is sufficient for that purpose that it was not within the explanation of the appropriation that was given, and scrutinised by Parliament, in the portfolio budget statements. We have added in our written submissions, as your Honours will see, at paragraphs 42 and 43 that quite apart from the portfolio budget statements one would expect expenditure of this nature to be specifically brought to the attention of Parliament and it ought not be treated as encompassed within vague generalities.
We have also quite separately put to your Honours an argument in paragraphs 44 to 47 of our written submissions that as a matter of parliamentary practice and in accordance with the Compact of 1965 because it is expenditure on a new policy, a radically new policy, one would not expect to find it in Appropriation Act (No 1) at all.
GLEESON CJ: There is no submission, is there, that the relevant provisions of the Appropriation Act (No 1) are invalid because of failure to comply with any constitutional requirements of specificity?
MR GAGELER: No, your Honour, that is not part of our submissions in chief. Our learned friends have various grades of argument that at the extremes, we say, would call into question the validity in terms of section 81 of the prescription of purpose, but I will deal with that in reply. Certainly, on our argument though, Parliament has been really quite specific. Your Honours, can I deal with standing - - -
HAYNE J: Before you do, there are two matters which were raised this morning which remain unanswered. One, the Governor-General’s message, at some point I want the text of that.
MR GAGELER: Yes.
HAYNE J: Two, at some point I want something that will explain to me your proposition about the Auditor-General taking account of the portfolio budget statement, in particular what statutory root there is for the proposition that you advance in that respect.
MR GAGELER: Your Honour, I had not forgotten either of those. I was going to mention at the end that the first we are seeking – we do not actually have the piece of paper but it is coming – and the second I will need an indulgence, your Honour, it would waste the Court’s time if I try to do that orally.
HAYNE J: Yes.
MR GAGELER: Your Honours, in relation to standing, what we say is this. This is not a case where the plaintiffs seek to challenge the validity of an appropriation. The cases that have raised issues about that are simply not in point. It is a case where the plaintiffs seek to uphold an appropriation and to declare and restrain unlawful Executive action. It is a case that really falls to be dealt with according to the usual Onus v Alcoa test.
The plaintiffs have an interest in obtaining by way of declaration an injunction, the relief they seek. We say that is not simply an interest that is greater in degree than that of an ordinary member of the public. We say it is different in kind from that of an ordinary member of the public. In respect of the second plaintiff, who is both a member of Parliament and the Shadow Attorney-General, she has, in our submission, by virtue of those two positions, an acute interest in upholding the principle of parliamentary control of Executive expenditure, that is in upholding not only section 83 of the Constitution, the direct prohibition, but in upholding section 27, and derivatively 26, of the Financial Management - - -
GUMMOW J: What about section 15 of the Financial Management and Accountability Act? That creates a civil rather than a criminal remedy. One question that arises is as to whether the remedies under that Act are in any way inadequate if we are talking injunctions.
MR GAGELER: I am sorry, your Honour is raising this as a matter of discretion or of standing?
GUMMOW J: As Justice McHugh pointed out earlier, I do not accept that they are discrete subject matters.
MR GAGELER: No, I appreciate that, your Honour. I can see - - -
GUMMOW J: It is not good trying to foist that on me because I just will not buy.
MR GAGELER: Your Honour, may I say this. If a point is going to be put by way of discretion that there are adequate alternative remedies or anything else, one would expect that to be spelt out in the pleading and one would expect it to be articulated in our learned friends’ argument. It may well be a matter for evidence but it just has not been raised against us. If it is, your Honour, we will deal with it as a matter of discretion.
HEYDON J: Is it really a matter of discretion though? If there are other adequate remedies, why would equity intervene?
MR GAGELER: If it is suggested that section 15 - - -
GUMMOW J: It looks like a constitutionalised Auckland Harbour claim. If you add that plus 26, 27 and the yet unrevealed involvement of the Auditor-General, where is the inadequacy of the structure which, consistent with section 97 of the Constitution and the other provisions of Part IV dealing with money, require intervention under 75(v) with injunctions?
CALLINAN J: Plus the Public Accounts and Audit Committee Act?
MR GAGELER: Dealing at the moment - - -
GUMMOW J: We have this word “injunction” in 75(v). It is doing work in a new ballpark that the English did not know about.
MR GAGELER: The English do not have 75(v), nor do the Americans.
GUMMOW J: Of course, but what this case is about – and you can call it standing or whatever you like – to some degree is the collision or interaction or meshing between Chapter III and this English constitutional doctrines embodied in Part IV of the Constitution.
MR GAGELER: Your Honour, there are several layers here which I need to unpack obviously. We are concerned in section 83 of the Constitution with a prohibition against doing something except - - -
GUMMOW J: Yes, there is a prohibition in section 53 as well. There are lots of prohibitions in the Constitution.
MR GAGELER: That is an entirely different nature. It is about proposals. The prohibition in section 83 focuses on doing something except as authorised by law. The law is the Appropriation Act. Your Honour, I need not go beyond really Marbury v Madison to say that where one has a law, one has a legal prohibition, it is the function of the judiciary to declare and enforce the law that creates that legal prohibition. It is as simple as that and section 75(v) is the direct jurisdictional route.
There are then two other questions, standing and discretion, and one needs to separate those two things out, in our respectful submission. In relation to standing, what we need to show is a special interest. The existence of some adequate alternative remedy, which we dispute, may be something that goes to discretion if we have standing, but in terms of standing, what we need to show is a special interest, and that was what I was addressing. I will come back to it.
In relation to the discretion, we accept that if it were raised against us and it could be shown that there were an adequate alternative remedy, then that would be a reason for the Court, notwithstanding a finding of unlawfulness, to withhold relief. Now, what are the potential sources of that adequate alternative remedy? One might be the Auditor-General coming along after the event and making a report to Parliament.
GUMMOW J: That is right, and the Parliament then passes an appropriation. It solves the problem.
MR GAGELER: Well, possibly.
GUMMOW J: Well, you laugh, but we are talking about the Constitution.
MR GAGELER: Well, possibly and possibly not. It might not solve the problem. There may be illegality. But what Parliament might do in the future, possibly, and has chosen not to do now is no reason for the Court not to declare and enforce the law as it currently stands. That is point one. We will deal with the details of the Auditor-General’s role in writing.
Another possibility, your Honours, is section 15 of the Financial Management and Accountability Act and/or the Auckland Harbour Board principle enforced by civil action. Who would be the parties to that civil action, the Commonwealth and the person to whom the Commonwealth has paid the money under contract? Not an adequate alternative remedy, in our submission, to restrain the Commonwealth from acting unlawfully in the first place. The other possibility perhaps is section 26 of the Financial Management and Accountability Act.
GLEESON CJ: Who takes proceedings, the Director of Public Prosecutions?
MR GAGELER: Presumably the Director of Public Prosecutions. Now, there are two things to say about that. That is something that occurs at the discretion obviously, properly informed discretion obviously, of the Director of Public Prosecutions, but it occurs down the track and is all premised on having either a valid or an invalid drawing right. We are seeking to step in before anybody does anything that is illegal and determine the validity of the drawing rights that have been issued and that are proposed to be issued. Your Honours, there is no reason, in our respectful submission, not to declare and enforce by way of injunction the unlawful activity of which we complain, if indeed it is found to be unlawful. That is exactly the approach that was taken in Brown v West. It resulted only in declarations but not an injunction.
GUMMOW J: There were no third parties in Brown v West, were there? There were no contractors?
MR GAGELER: Yes. The form of injunctive relief that was being sought in Brown v West may have prevented the performance of contractual obligations. That is why the Court said that they would not grant the form of relief that was there being sought. We seek a different and more narrow form of relief, your Honour. The problem identified in Brown v West simply does not arise on our reformulation.
Your Honours, just to finish what I was saying about standing, in practical terms the position of the first plaintiff is really no different from that of Mr Brown in Brown v West. We know a distinction can be drawn to say Mr Brown was actually the recipient of the illegal payment and that gave him some different status for the purposes of standing, but the reality was that Mr Brown, who had pleaded his role as Shadow Attorney-General – you see that in the first paragraph of the judgment – was seeking to prevent unlawful expenditure. That was his real interest. We ask, if the second plaintiff does not have standing, then who does?
GUMMOW J: Well, the State Attorney. It is not a case of a wrong without a remedy, even on your theory.
MR GAGELER: No.
KIRBY J: Yes, by why should it have to rely on a State Attorney to uphold the rule of law of the Constitution?
MR GAGELER: The State Attorney obviously has standing. Your Honours, the second plaintiff, in our respectful submission, clearly has standing on the special interest test and the constitutional principle which is sought to be vindicated is not a State/federal constitutional principle, it is a Parliament Executive constitutional principle and therefore she ought - - -
McHUGH J: It is a federal principle, is it not, because of the provisions of sections 94 and 97?
MR GAGELER: Yes.
KIRBY J: And the role of the Senate.
MR GAGELER: Yes, I would accept that. But, more acutely, it is a Parliament/Executive divide. In relation to the first plaintiff can I just say this. His interest is obviously more practical. He is the secretary and the public spokesman of an organisation that is actively campaigning against the initiative that this expenditure is designed to promote. He is, in a real sense, in no different position from a competitor who seeks to restrain the conduct of another competitor – which is unlawful – and by which that other competitor obtained some advantage. The analogy is not a bad one. If your Honours please, those are our submissions.
GLEESON CJ: Thank you. Yes, Mr Solicitor for
Western Australia.
MR MEADOWS: May it please the Court. At the
outset may I refer to the fact that we filed some supplementary written
submissions which we would
seek leave to put before the Court. They contain
additional factual material relating to the historical and present approach of
State Parliaments to the issue of what amounts to “the ordinary annual
services of the
Government”.
I would also like to refer, if I may, to a bundle of documents which comprise the secondary materials which we refer to in our list of authorities and also, of course, in the context of our submissions. These materials are, in essence, parliamentary documents, particularly from the Western Australian Parliament dealing with that Parliament’s understanding of the phrase “ordinary annual services of the Government”.
KIRBY J: The Commonwealth says that all of this State practice is irrelevant but there does seem to be some commonality in the way it has been approached by the States.
MR MEADOWS: I think that is right, your Honour. We would say that the concept of “ordinary annual services of the Government” predates the federal Constitution and it was an expression which was understood at the time of the development of the federal Constitution and if one looks at the historical context in which the Constitution was developed then how that expression was understood at that time is, in our submission, relevant to its understanding today.
We have sought to outline in our written submissions how that concept has been dealt with by State Parliaments and legislatures in other parts of the world in the history both before and after the development of the federal Constitution. As your Honour has said, it is remarkable how consistent the approach has been, that one must look at those words in their context and to construe a Bill which is for the “ordinary annual services of the Government” in conformity with the ordinary construction of those words.
In the context of the federal Constitution, of course, as in the case of the Western Australia Constitution, it is a phrase which is to be found in the Constitutions. In the federal arena, of course, it is sections 53 and 54 of the Constitution. So that when a Parliament, in an appropriation Bill, refers to the Bill being one “for the ordinary annual services of the Government”, then you must look at that Bill against that constitutional background.
Of course, we do not seek to call into question the validity of the Appropriation Act in this particular case. Indeed, the Parliament could put into a Bill described as one “for the ordinary annual services of the Government” something which is clearly not something that falls naturally within that rubric. Provided the Senate just allowed that to go through and did not exercise what powers it had, then obviously the government could spend the money in accordance with that particular appropriation.
But where the words of the statute are such that there is no clear specification of the particular expenditure involved, and it is expressed in general terms, then one must look at what the words, “the ordinary annual services of the Government” mean in order to determine whether the particular expenditure which is proposed by the government is one of that class.
With respect, we would adopt what my learned friend, Mr Gageler, has said in relation to the impact of the Compact of 1965 on the interpretation of this particular Appropriation Act, and that one must assume, in the absence of some other indication, that that Act has been passed on the assumption that the items in it are covered by the Compact, that is to say that there is not anything in there which would be contrary to the terms of the Compact and, specifically, anything - - -
GUMMOW J: There is no complaint by anybody that there has been any collision with 53 and 55 of the Constitution.
MR MEADOWS: We accept that - - -
GUMMOW J: Sections 53, 54 and 55, is there?
MR MEADOWS: I accept that, your Honour. But what we are saying is that that being so, then one must construe the Appropriation Act against that background, that these items of expenditure which were authorised by the Appropriation Act must be ones which – sorry, not the items in the Bill, or in the Act, but the actual expenditure proposed must be one which falls within the area which is within the Compact.
GUMMOW J: Are you intervening to support Mr Gageler’s arguments on the construction of the appropriation?
MR MEADOWS: Yes, we are. In fact, I was going to say as my next point that we do not wish to add to what he said in relation to the construction of the Appropriation Act and - - -
McHUGH J: Paragraph 47 of your submissions I think makes that plain.
MR MEADOWS: Yes, your Honour. Indeed, the supplementary documents to which he referred, and which are brought into consideration by the Act itself. But what we do say, in addition to what my learned friend has said, is that if you get to the point where you have an item in the Appropriation Act, as here, which was not sufficiently specific to authorise the particular expenditure proposed, you then have to look at that expenditure, that is the proposed expenditure, and ask the question whether it would fall within “the ordinary annual services of the Government”.
When you take that step you then have to examine in the context of the previous history of appropriation and expenditure on the part of the government to see whether or not what is proposed is one which could fall within the services which are ordinarily provided by the government. In other words, it has to be reasonably incidental to a service which is ordinarily provided by the government.
As my learned friend, Mr Gageler, has put to you, what we are talking about here is an entirely new initiative which, as we have pointed out, in our submission, seeks to impose a new industrial relations regime which at least in part would exclude the States from an area of operation which it has traditionally enjoyed so we would submit that expenditure - - -
KIRBY J: I have not read the advertisements myself. I will, but do they address that issue of the shift from State to federal regulation?
MR MEADOWS: It is quite apparent from a statement made by the Prime Minister, in a ministerial statement which he made to the House of Representatives on 26 May 2005. This is to be found at page 1576 of the special case book, volume 3.
KIRBY J: I know that that is the announced policy of the government but in the advertisements, which are the subject of these proceedings, is that issue addressed?
MR MEADOWS: Yes.
CALLINAN J: At page 45, it is an annexure to the special case.
MR MEADOWS: That is in case book volume 1.
KIRBY J: So is that section a national system, is it?
MR MEADOWS: Yes, your Honour. This is a system which is yet to be authorised by legislation and, in our submission, it cannot be described as the provision of an ordinary annual service of the government let alone the advertising campaign which is designed to promote it.
KIRBY J: The argument to the contrary is that governments of all persuasions are constantly evolving policy and creating ideas and putting them about and that, in this particular case, that is what they have done and put about these advertisements to explain them.
MR MEADOWS: This is in advance of the implementation.
KIRBY J: This is not the first time we have seen advertisements from governments, including State governments.
MR MEADOWS: Quite so, I accept that, but if it is to explain an initiative which is now authorised by legislation and to explain how it is to be implemented or how it is going to affect people, then there cannot be any debate about it provided there is some appropriation allocated towards it, as my learned friend has pointed out. There are examples of it throughout the budget paper.
HAYNE J: Are you saying that because of the stage events are at there is no relevant purpose of the Commonwealth? Is that what you are saying?
MR MEADOWS: No, I am not saying that at all. Certainly, there is nothing to stop the Commonwealth from proceeding to legislate provided it is within Commonwealth powers, of course.
HAYNE J: Is it a purpose of the Commonwealth to advertise in connection with a proposed unformulated subject for legislation that would fall within a specific head of power under section 51?
MR MEADOWS: It could be if it were authorised by an appropriation. Our point is simply that that has not been demonstrated.
CALLINAN J: What about if the advertisement can be characterised as something done in order to quell an industrial or a threatened industrial dispute? Would that put it within the appropriation?
MR MEADOWS: It is not evident from the outcomes which are outlined at pages 46 and 47 of the portfolio budget estimates.
CALLINAN J: Perhaps an industrial dispute about the proposed changes. What I have in mind is the very, very broad definition that this Court had always given of an industrial dispute, paper disputes and threatened disputes. I just wondered whether that is a possible characterisation of the advertisements. If it is, what flows from that? I do not know.
MR MEADOWS: It is not apparent from the advertisements themselves, I must say.
CALLINAN
J: I do not know about that. It says:
In 1996 when changes were made . . . some people expressed concern. Others tried to exploit those concerns.
So on one view it is aimed at exploitation of concerns about the further proposed changes. I am looking at page 45.
MR MEADOWS: Yes, I understand that, your Honour, but if one comes back to the terms of the appropriation, there is no provision for such advertising within the appropriation.
CALLINAN J: I do not know. It depends how you read the appropriation, I suppose.
MR MEADOWS: We are talking about outcome 2 and the description of what is - - -
CALLINAN J: What page should I be looking at?
MR MEADOWS: Outcome 2 is at page 76 of the Act, “Higher productivity, higher pay workplaces”. Then if you go to 3.3.2 at page 46 of the portfolio budget statements, one sees there what is involved in that particular item.
McHUGH J: One of the problems of the case in terms of giving relief for the future is because one cannot be sure what the terms of the advertisement may be. Take the document at paragraph 45. If you construe it as a document that simply says this policy of the government is going to be a good thing, it is not easy to relate it to higher productivity or higher pay workplaces. After all, you would hardly say that if the Australian Cricket Board published advertisements saying what a great team the Australian team was, it would not improve their performance or their productivity, nor their pay.
MR MEADOWS: They do not need an appropriation to do that, your Honour.
McHUGH J: No, I know they do not but if they did, you would not say - - -
HAYNE J: They need something.
McHUGH J: But if some of these advertisements do in the future move into areas such as productivity, the fact that it is a new policy may be completely irrelevant.
MR MEADOWS: Except that what the appropriation authorises is the development of the policy. There cannot be any debate about that. This is about a lack of appropriation for the promotion of the policy by advertisements. If you look at that list in the portfolio budget statements, it is quite apparent that it does not go further than the development of the policy and it envisages, we would submit, implicitly at least, that there will be a legislative initiative and ultimately that would have to be put to the Parliament and in its implementation there could easily be some provision made for - - -
GUMMOW J: But an advertisement calling for input, which is the current word, from the public, what would be wrong with that on the proposed policy?
MR MEADOWS: I do not think there would be anything remiss with that, your Honour, in that that would be an advertisement for a different purpose. This is an advertisement for the promotion of the initiative. If I can come back to our primary point, that is that this particular advertising campaign cannot be brought within or does not fall within the rubric of “the ordinary annual services of the Government” because it is impossible for the Commonwealth to point to the existence of the provision of that service, let alone the promotion of its proposal. If it please the Court.
GLEESON CJ: Thank you, Mr Solicitor. Yes, Mr Solicitor for the Commonwealth.
MR BENNETT: If the Court pleases. Your Honours, we have also filed some supplementary submissions which your Honours no doubt have. I propose to deal with the whole of the argument, except for the argument based upon “the ordinary annual services of the Government”. That argument will be dealt with by Mr Lloyd. I propose to start by just giving a short table of contents. The main submission that we will be making is that the expenditure for a number of reasons on these advertisements falls squarely within the relevant outcome of increased productivity and higher pay workplaces and also falls within a number of categories referred to in various parts of the portfolio budget statement, and I will take your Honours to a number of those.
We will be taking a much broader view of some of the words that have been taken by my learned friend and we will be submitting, along the lines of a question your Honour Justice Kirby just asked, that there are areas of legislation and government policy which require co-operation by members of the public, or in this case employers and employees, in order to facilitate their implementation. Now, sometimes one gets that even with regulatory legislation where one wishes to encourage compliance.
Let me put this very simple example in that area to the Court. Let us suppose that there had been, as there was in the United States, a major political controversy as to what is the appropriate speed limit on country roads and suppose there was a government faction which said it should be 90 kilometres an hour and an opposition faction which said it should be 110 kilometres an hour. So the opposition faction has been advocating a higher speed limit and saying that in general it is perfectly safe to drive between 90 and 110. The government takes the view that 90 is the appropriate speed limit and it is concerned in the light of an opposition campaign that many people will drive at speeds between 90 and 110 because of the opposition campaign which has said it is safe to do so. The government chooses under a general appropriation for road safety to advertise, “Our legislation is right and justified because driving at more than 90 is dangerous”, or in terms closer to the reality in Australia today, “There is no such thing as safe speeding”.
Now, why is not the government entitled to say, “Under our general mandate for road safety appropriation, we wish to advertise to people the justifiability of our legislation so as to increase compliance. We all know that in every area of regulation compliance will be increased if the community believe that the regulation is justified.” That is why airlines do not just say, “There is a regulation saying you must not use your mobile phone”; they say, “It will interfere with our sensitive navigation equipment”. They do not just say, “Our regulation prohibits smoking in the toilets”; they say, “Smoking in toilets is a fire hazard”.
In my respectful submission, it is frequently, in relation to legislation calling for compliance, which is my first example, a necessary part of the administration of such legislation to persuade people of its desirability so as to encourage compliance. Now, that is one area. A second area where governments need to advertise is the example that is - - -
KIRBY J: In the old days that used to be done by governments and ministers making speeches and issuing press releases and not using public funds to, as it were, advance the government’s policy.
MR BENNETT: Yes.
KIRBY J: The question is, if you do you use public funds, is the law of the Constitution such that we should read the Appropriation Act in a fairly strict way so that Parliament has a transparent opportunity to address itself to authorising that to be done. After all, we are not talking about peanuts here. There is quite a lot of money being expended.
MR BENNETT: Yes. Your Honour, the ultimate submission is, and I make it in a number of different ways, that advertising the merits of legislation in some types of case for proposed legislation is such an essential and normal and natural and regular part of achieving the purposes of that legislation that it will tend to be regarded as falling within general words about promotion of the objects of that legislation.
McHUGH J: Mr Solicitor, your submissions at the moment are as general as the contents of the documents that are before us. I mean, you have to get down to some specifics. You are talking in extreme generalities. Who were the people who were going to comply and what are they going to comply with? We do not know what the legislation is yet.
MR BENNETT: No, your Honour.
McHUGH J: How do we relate it to higher productivity?
MR BENNETT: That was simply an example, your Honour. That is not this case. In this case one gets it much more directly and the reason one gets it much more directly is that industrial relations, par excellence – and even more than that, industrial relations where one of one’s policies is increased negotiation between employers and employees – is an area where the objectives of things such as higher productivity, higher pay workplaces and so on are only going to be achieved by the actions of employers and employees.
If the government proposes to lay down a framework for employers and employees to work together to achieve objectives of that sort and if there is a campaign designed to make one of the two groups, employers or employees, feel such antipathy to that framework that they are unlikely to be willing to work within it, then the objective may not be achieved.
McHUGH J: But your submission seems divorced from reality. What you seem to be doing in these advertisements is persuading the community that it is a good thing to have this legislation. Now, that may or may not be correct, but it has nothing to do with compliance generally. It seems to have everything to do with a government’s standing in the polls.
MR BENNETT: No, your Honour, no for three reasons. First, I am not talking about compliance. Compliance was an example I gave as one area. Industrial relations is an area where it is not a matter of compliance, in small part it may be, but industrial relations is an area where one is dependent on co-operation on the people working together in a framework. Now, if that framework – or the proposed framework in this case – is attacked, if one group is encouraged to regard the framework as one which disadvantages it and which is against its interests and so on, then that is destructive of the framework working. It is as simple as that.
McHUGH J: But who are the people who are going to be encouraged?
MR BENNETT: The workers, your Honour, the employees.
McHUGH J: The workers on the factory floor?
MR BENNETT: Yes, your Honour.
McHUGH J: They are going to take notice of these advertisements and they are going to go along and negotiate with their employers because they have read these advertisements. Is that the proposition?
MR BENNETT: They may not be discouraged from doing so by the advertisements on the other side if they are dissuaded by our advertisements.
KIRBY J: But the other side are using private funds of a voluntary membership organisation. You are dipping into the people’s money.
MR BENNETT: Yes, your Honour, we are.
KIRBY J: Parliament is the guardian of the people’s money.
MR BENNETT: It is, your Honour.
KIRBY J: It guards it by the law of appropriation.
MR BENNETT: And these appropriations are for a purpose which is served by reducing or eliminating the antipathy of the type to which I have referred, in the same way as an appropriation for road safety would, in the example I have given, justify entering what had been a political debate about the desirability of a speed limit, in that case to encourage compliance, in this case to encourage co-operation.
KIRBY J: But in your speed limit hypothesis, is there a statute already enacted providing for this policy? You see the problem here is that no one, including this Court, knows what the policy of the government precisely is.
MR BENNETT: Your Honour, that is a separate argument, but the answer to that is very simple. One can poison the well in advance of the detail being laid down.
KIRBY J: I do not see how. The Parliament takes its ordinary course. The government, as is now the case, has a different position as was when the advertisements were issued in relation to the Senate. I do not quite understand. Is the purpose to try to put a little bit of helpful pressure on Members of the Parliament?
MR BENNETT: No, your Honour. That has nothing to do with the case. There is no suggestion of that, although my learned friend says in his submissions that - - -
McHUGH J: Well, I must say that was the first thing that occurred to me - - -
KIRBY J: We are not naïve, Mr Solicitor.
MR BENNETT: No, your Honour.
McHUGH J: - - - that your justification would be to put pressure on Members of the Parliament who might have second thoughts about this, particularly those who thought that there might be problems with the State Governments losing their control over industrial relations.
MR BENNETT: No, your Honour.
McHUGH J: I may be unduly cynical, but that was the first thought that occurred to me, that it was to put pressure on parliamentarians. You would have to be naïve to think that these advertisements are going to convert those who are putting the advertisements against you.
MR BENNETT: I do not think that is likely, your Honour.
McHUGH J: No, of course it is not.
MR BENNETT: It is asserted that the proposed reforms would fall, if they needed to – which they do not – squarely within the identified outcome. That appears from the Prime Minister’s speech which is at pages 1576 and following.
McHUGH J: Before you take us to that, on your theory of this case and of this appropriation, the fact that this legislation is in the future is beside the point, is it not? On your argument the government could have a standing advertisement every day extolling the virtues of its present industrial relations policy because you say it is wonderful and it will encourage employees to negotiate. You would have to go that far, would you?
MR BENNETT: Your Honour, if there was - - -
KIRBY J: Like Bulgaria used to be. That is what the press in Bulgaria and Romania used to do, full of the merits of the great party leaders.
MR BENNETT: Your Honour, we are not putting the merits of the leaders. If there was a campaign telling workers that the present industrial relations system was biased against them to such a substantial extent that they ought to either take industrial action or not co-operate with the existing system or both, a government which was seeking to achieve higher productivity and higher pay workplaces would be entitled, as part of an appropriation for that purpose, to answer the advertisements and say, “No, you are well looked after by the present system and if you work within it we will together achieve great things”. That would be a legitimate use of money within such an appropriation.
McHUGH J: That is the question here. There is not the slightest doubt that Parliament and the Commonwealth have all the power in the world to authorise an intensive advertising campaign, but the question is whether or not these Appropriation Acts authorise the expenditure of money on an advertising campaign, given the terms of the Appropriation Act.
MR BENNETT: Yes, your Honour, I accept that fully. My submission goes precisely to that issue.
McHUGH J: As the plaintiffs put the case, if you specify with some particularity what you are going to do, even if it is something as general as advertising, at least a Parliament can evaluate it, the Senate can rule on it, but you seem a long way removed from advertising when you talk about policy or outcome of higher productivity and higher pay workplaces.
MR BENNETT: Your Honour, the example I gave about road safety is a very good example.
McHUGH J: Yes, but there you specified two speeds against a background of road safety. It is not hard to relate those things together and say an advertisement for one speed as opposed to the other goes to road safety. At the moment, Mr Solicitor, I am having difficulty in seeing how these advertisements can be related to higher productivity or higher pay workplaces.
MR BENNETT: Your Honour, if they do it in a number of ways which we have explained in some detail in our submissions, but what I am putting at the moment is the clearest of those ways which is that in the industrial relations system, it is a system which requires co-operation by people in it, employers and employees, and if one of those two groups is encouraged by an advertising campaign to dislike the existing or proposed system, then, if one wishes to achieve the objectives of increased productivity and higher pay workplaces, one may need to endeavour to counter the growth of that antipathy so that people do work within the system without feeling that the system is one which is opposed to their interests, in the same way as one would need to discourage a motorist who was led by the political campaign in my hypothesis to believe that going at between 90 and 110 was perfectly safe. That is a compliance example, but for that reason he would be less likely to obey the traffic law.
Your Honour, I was referring to the Prime Minister’s speech at page 1576. My purpose in doing this is twofold.
KIRBY J: This is after Appropriation Act (No 1) was enacted?
MR BENNETT: Yes.
KIRBY J: How could the Parliament have had the slightest idea of what the Prime Minister was going to announce weeks after the enactment of the Act?
MR BENNETT: It would not, your Honour. To answer that I have to put my next submission and come back to this, so I will go straight to that. Part of what is put against me involves what one might call the major/minor premise fallacy of statutory interpretation. When one construes a statute and the Court construes a statute, its function is to construe the words used. That is the first step. The second step is to apply the meaning it gives to the words to the situation before it and look at the application of the meaning it has determined.
In carrying out the first of those functions, a court is concerned with parliamentary intention ascertained in the various ways the Acts Interpretation Act tells us and the law of statutory interpretation. In carrying out the second function, the court has no interest whatsoever in what Parliament may have thought. The court is not concerned to ask: how would Parliament have decided this case if it had come before it? One can think of many examples of that. Perhaps let me give a simple one. Suppose that under the health insurance legislation there is a provision enacted which says that health insurance benefits may be declined or not paid to a doctor who has been guilty of infamous conduct. Assume such a provision for the moment. Assume the question before the court is whether a doctor who has engaged in euthanasia was guilty of infamous conduct. Assume that question.
The court’s function would be to ascertain the meaning of the words “infamous conduct” as used by Parliament and to ascertain the meaning of those words in gross. That is the major premise. Having done that, it would then have to apply that meaning to euthanasia and ask whether that is or is not within those words. The one thing the court could not do – and this is what my learned friend is asking the Court to do in this case – is say, “We think that Parliament would not have approved of euthanasia. We know that because of its Northern Territory legislation. Therefore, Parliament would have intended us to decide that euthanasia is infamous conduct, therefore we should decide that way”. That would be a total abnegation of the true function of interpretation.
KIRBY J: It comes about by this use of “intention” in my view. It slips all too easily into subjective intention of the members of Parliament, whereas the intention of Parliament properly used is an objective construct which the court declares.
MR BENNETT: Yes, your Honour, except that in my example the existence of the Northern Territory legislation is an objective fact which the court could look at under the Acts Interpretation Act. So that is part of the problem but the real problem in that example is that when the court is at the second stage of applying the interpretation as found to the particular facts before it, the court has no regard whatsoever to what Parliament would have thought. That is irrelevant.
Whether Parliament would have thought that euthanasia was infamous conduct is just totally irrelevant to the question before the Court. The question before the Court is, what do the words “infamous conduct” mean? What is the definition we give them which does not look to examples?
KIRBY J: Mr Solicitor, you seem to love your analogies and parables and you want to talk about speed limits and misconduct, but could we get back to this particular – because we have hard facts. We have the terms of the Appropriation Act, the terms of the PBS, the parliamentary practice, and it seems to me that you really have to grapple with Justice McHugh’s question which is this case.
MR BENNETT: Yes. My learned friend is going even further than those two examples because he is reasoning from an expressio unius, but from an expressio unius he is arguing that Parliament would not have intended advertising the merits of the legislation to be included in this outcome. Now, that is not the question for the Court. It is as distant from the question for the Court as in the euthanasia example.
KIRBY J: He just says look at the Appropriation Act, look at its terms, look at the schedule, look at the PBS, look at the Compact, look at the parliamentary practice, look at the high constitutional principle, and when you look at all of those things the Parliament has not – it is not a matter of what it would have done – it has not in fact given its endorsement to this appropriation for this purpose.
MR BENNETT: He says that, your Honour. We dispute that.
KIRBY J: You then start to say pick up the Prime Minister’s speech weeks later on legislation which still has not emerged to the light of day and derive a purpose from that.
MR BENNETT: I am not using the Prime Minister’s speech, your Honour, to construe the legislation. I am using the Prime Minister’s speech at the second stage of the interpretation exercise which is working out whether, having ascertained the meaning of the words, this falls within it, and I am demonstrating that it does. I am looking at this speech for the purpose of showing the characterisation of the expenditure which is the second stage, the application stage, but it is not for the purpose of construing. Purpose of construing, one looks at the words and the words are fairly straightforward. My learned friend has not said a word about the words “increased productivity, higher pay workplaces”. He has not mentioned that. He has only talked about whether Parliament would have intended to include advertising without expressly saying so. That is all he has submitted. The analogy is the euthanasia case. He is talking about the leg where one applies the meaning, which are the facts, not the - - -
GUMMOW J: I am not sure he says any advertising either. That is one of the things that worries me about all this. I think he concedes that some advertising would be permissible, even in this context – I may be wrong – and you are then in the area of how you ever get to relief - - -
MR BENNETT: Yes, that is another problem.
GUMMOW J: - - - and in which I have very much in mind what Justice Jacobs said in the AAP Case at the moment.
MR BENNETT: Yes. Now, I am going to the Prime Minister’s speech to demonstrate that there is a perceived relationship between the proposed legislation and the outcome of increased productivity and higher pay workplaces. Having done that, I will - - -
HAYNE J: As Justice Heydon points out to me that the speech is in fact a little over a month before the royal assent to the Appropriation Act (No 1).
MR BENNETT: Well, your Honour, I am not going to the speech to construe the Appropriation Act.
HAYNE J: Yes, I understand that, but there was much debate about the sequence of events.
MR BENNETT: Yes. So the first reason I am going to the speech is to demonstrate that relationship and the second reason is to demonstrate the extent to which, as I have submitted, this is an area where one is dependent on the goodwill of the participants, and industrial relations is par excellence, if your Honours will forgive me using that phrase for the third or fourth time, an area where that is so. If your Honours go to page 1576 in volume 3, your Honours will see at the bottom of the second column of 1576 - - -
KIRBY J: Just answer this question, given the time sequence which has been drawn to notice, is there any indication in the Prime Minister’s speech that a major campaign of advertisement was going to be engaged in?
MR BENNETT: No, your Honour.
KIRBY J: Is there anything in the record before us that indicates that before the date of the royal assent to the Appropriation Act (No 1) on 29 June 2005 that there was any such indication of their government’s intention to expend sums under the Appropriation Act on advertisements?
MR BENNETT: I am not
aware of any. I have not checked the chronology for that purpose.
Your Honours will see at the bottom of page 1576, at
the bottom of the
second column:
As in the past, our future living standards will rely largely on the productivity of our workers and their workplaces. This government trusts the employers and employees of Australia to make the right decisions in their interests and in the interests of their nation.
So what is being talked about is the extent to which there it is
the actions of employers and employees which determine productivity.
One cannot
pass an Act saying, “There shall be high productivity”.
The measures I am outlining today represent the next logical step . . .
The essence of these reforms is to further promote and facilitate the making of agreements at the workplace level. Only through this will the full potential for productivity . . . be realised.
Then there is a further reference at the top of the second column on page 1577, the third and fourth lines, about sustaining “productivity growth and higher living standards”. So one of the purposes of the government is to pass legislation which will cause higher productivity, higher living standards and so on, one aspect of which is higher pay workplaces, and that is something which requires employers and employees to work together to achieve within a framework which the legislation is going to lay down. One of the matters which is in the PBS is legislation development towards those objectives.
My friend says there is no way those words can possibly mean advertising. We would submit that is just not so. If legislation of this type is to be effective, one thing that it needs is acceptance by those who are going to act under it, hopefully to give rise to the achievement of these outcomes. If one then has a campaign – and I will take your Honours to a few examples in a few minutes – which basically says the proposed workplace reforms are inimical to the interests of workers, will cause them harm, will result in people losing their jobs, will cause suffering and unfairness, and the catchphrase used again and again in every advertisement is “Your rights are worth fighting for”, and some of those specifically encourage things like a week of action and stop-work meetings and so on.
Now, surely, one would have thought, if one is proposing legislation which has as one of its purposes workplace co-operation by employers and employees resulting in higher productivity and higher pay workplaces, what could be more conducive to that goal than countering that type of advertisement.
McHUGH J: Yes, but how? Do you suggest that because of these advertisements the workers will now produce 16 units a week and without them they are only going to produce 15 units a week? Is that the proposition?
MR BENNETT: Your Honour, it is - - -
McHUGH J: You are talking in generalities, Mr Solicitor. At least at the moment, it seems to me that if your argument is correct, it could only have the remotest effect on productivity.
MR BENNETT: Well, your Honour, one of the matters which contributes to productivity is the work practices of various kinds of a type which are negotiated between employers and employees. Another is, I suppose, the absence of strikes and stop-work meetings and so on. There are numerous things of that type which would contribute to higher productivity. In my respectful submission, the - - -
McHUGH J: But what you seem to be arguing for, and just to take the illustration you have just given, is that these advertisements are going to deter those who would otherwise have gone on strike or held stop-work meetings from doing so.
MR BENNETT: That is one aspect.
McHUGH J: Now, is that a serious proposition? Do you think anybody who is opposed to this legislation, who is going to go on strike, is going to be persuaded by these advertisements? It just flies in the face of reality. The target of these advertisements are not those workers, surely, not the people who are prepared to take industrial action. It has to be directed at somebody else, like Members of Parliament who might be waivering in the party room or in the Parliament.
CALLINAN J: Or the uncommitted workers. I would not make the assumption that all the workers are committed that way. Why should you?
MR BENNETT: Your Honour, the campaign on the other side is directed at workers, one would assume. One could be cynical there no doubt and say it may be directed at parliamentarians, but I do not make that submission. We would submit that it is the - - -
KIRBY J: Would that be permissible within the Appropriation Act, if that was the true character?
MR BENNETT: No, of course not, your Honour, but there is no way one could draw that inference in this case. The advertisements on the other side are clearly directed at employees – your rights are worth fighting for.
McHUGH J: Yes, they want the workers to fight to influence parliamentarians to marshal public opinion to raise consciousness so that there will be a community backlash and the government will back off its legislation. That is what this is all about. That is the reality of it.
MR BENNETT: No, your Honour. One cannot draw that inference as - - -
GUMMOW J: Sounds like a healthy bout of political free speech, does it not?
MR BENNETT: Your Honour, part of it is but that does not - - -
KIRBY J: That generally is not funded from the public purse.
GUMMOW J: The question at the end of the day though is, although many political questions are constitutional questions and Sir Owen Dixon said a lot of constitutional questions are political questions, you can get out of that any compelling form of relief which Mr Gageler seeks.
McHUGH J: The strength of your case seems to rely in the nature of the relief that the Court could grant.
GLEESON CJ: Which is tied to the Prime Minister’s speech. What the relief sought, on page 42, is is declarations relating to advertisements promoting the workplace reform package announced on 26 May 2005 and injunctions prohibiting drawing rights in relation to any advertising promoting that reform package, not the advertisements annexed to the documents in the papers. They are just illustrative of the background of this litigation.
GUMMOW J: In the AAP Case 134 CLR 412, which I mentioned to you before, Justice Jacobs said that there may be a practical impossibility in framing relief either by way of injunction or declaration, given the uncertainties and imponderabilities of these political questions of public expenditure.
MR BENNETT: Your Honour, I am going to come to that. One has to be careful in this area. One cannot say because one detects – and we do not concede for a moment that one can – or draws an inference about an ultimate purpose which is a political one, that that in some way disqualifies something otherwise permissible. If that were so, every time there was something done by government which had a purpose beneficial to the community, one could criticise it by saying, “Oh no, you only wanted to do that so you could get re-elected”. That is what democracy is about. It is about doing things which get the government re-elected by the good government and other things likely to give rise to public support.
KIRBY J: But until recently that was done by ministerial statements and the private funds of each side, but now we are seeing both levels of government dipping into the people’s money. That is where the issue of compliance with the Constitution and the Appropriation Act becomes important.
MR BENNETT: Your Honour, there is no question that of course one cannot either under this or any other appropriation use funds for the sole purpose of a political objective, but if one is using them for a - - -
KIRBY J: I did not take the plaintiff to dispute that. The plaintiffs say it just has to be done clearly and with the authority of Parliament, and here it was not.
MR BENNETT: Well, your Honour, we say it was. The reason we say it was is that the – we have legislation which is directed to the very outcome, which is the one we are construing and considering, and we have a campaign, the natural and probable effect of which may well be - - -
KIRBY J: But how can one say the legislation is directed to that when nobody has seen the legislation?
MR BENNETT: We have a speech of the Prime Minister setting out what the reform proposals are in - - -
KIRBY J: The Parliament has not seen the legislation, and had not seen it when it enacted the Appropriation Act (No 1).
MR BENNETT: No, your Honour. I am sorry. Your Honour is, with respect, again conflating the two steps in statutory interpretation. We are simply not concerned with whether, if the officious bystander had walked into the Parliament and said, “Is this particular advertising campaign something you intend to permit or not permit by this appropriation?” the answer to that question would be a total irrelevancy. The question is, “What do the words mean?” Having worked out what the words mean, the Court has to ask the question “Does this particular application fall within the meaning so found?” It asks parliamentary intention in relation to what the words mean. It does not parliamentary intention in relation to how it would have decided this case if asked. That is the fallacy of my learned friend’s submissions in this area.
KIRBY J: Yes, but the fallacy of your view is that you just do not bother asking Parliament. You do not bother getting the parliamentary approval for the appropriation. You dress it up in a vague and general statement of an outcome, and then with the remotest possible connection with it, and still not knowing what the legislation is, you say this is one way of achieving the objective of legislation yet to be seen.
MR BENNETT: Your Honour, one does not need to see the precise words of the legislation in order to see what its objective is. My learned friend has pleaded his case in terms of the Prime Minister’s speech which I am taking your Honours to. That speech sets out a series of matters in fairly substantial detail as to what is intended in the legislation. I will not read it to your Honours but it is at page 1576 to 1581.
Those putting the advertisements on the other side have themselves attempted to say what they believe will be in it and to attack that and we are seeking to defend the policies defined in this statement and thereby the resulting legislation and thus prevent the advertising campaign which the ACTU has mounted from having its natural or probable result of frustrating the effect of the legislation by causing people not to co-operate with it and not to work within it. Your Honours, it is as simple as that. That is the primary - - -
McHUGH J: One would have expected you would put on some evidence from industrial psychologists and other people to say, “Well, this will be the effect on productivity” but at the moment all we have is your assertion from the Bar table and, for the moment, I do not find it persuasive. You may well be right but I would like to have seen some evidence from experts who would say that this will improve productivity.
MR BENNETT: Your Honour, it is not a matter for experts, with respect.
McHUGH J: Why not?
MR BENNETT: It is a matter of the natural and probable consequence - - -
McHUGH J: You are making an assertion about the effect of the opposition’s campaign on productivity and that can only be the effect on their mental states, on their morale, and if your advertising campaign in whole or in part is directed to improving productivity you would expect some evidence to show it that it would.
MR BENNETT: Well, in my respectful submission, your Honour, almost any evidence one would have put on along those lines would have been quite inadmissible and probably not within an area of expertise of the type which this Court defined in the Foster Joy Case [1960] HCA 42; 103 CLR 486. The sort of expertise of a person who would say, “In my opinion, reading this advertisement is or is not likely to interfere with productivity” is not expertise to which any respect would be given by the rules of evidence, either under the Foster Joy Case or under the modifications in evidence legislation. But, your Honour, one only has to read some of the advertisements to see the natural and probable consequence of them. They are advertisements which give examples of people said to be facing unfair situations under the proposed new legislation and then the general sentence on each page, “Your rights are worth fighting for”.
Now, your Honour, if one is looking at what is likely to be the degree of success of legislation, one of the stated purposes of which in the Parliament is increasing productivity and higher pay workplaces and so on, one asks, what is likely to be the effect upon the implementation of such legislation in achieving of those results of that campaign unanswered and to what extent can that effect be assuaged by answering it, there is only one answer one can give. One does not need experts for that answer. It is simple, whether one uses the word “commonsense” or reasoning of a type which courts have engaged in for many years. That is the first way one gets the result.
The second way is that at a much more general level the “legislation development” includes, in my respectful submission, communication with the public prior to its enactment in many cases. That is part of the democratic process so that the public can see what is proposed, can express views on it and so on.
Now, part of good government, in my respectful submission, involves informing, in relation to proposed legislation, what is intended and, as ancillary to that, putting arguments in favour of it. There is nothing surprising or unusual about that. We would submit (a) that comes within the outcome because if the legislation has the purpose of achieving the outcome then that type of normal consultation and discussion with the public is – and advertising to the public if one likes – in my respectful submission, part of the process. Here that is even more so where one has the phrase “legislation development” which, in my submission, as a matter of simple English clearly includes things normally done in relation to proposed legislation, which would include a level of publicity.
Now, it is then said against me this is unlikely to succeed. Your Honour, that is a matter of opinion. It may be likely to succeed or unlikely to succeed, but it does not fall or not fall within the Appropriation Act because one takes the view that it is likely to succeed or not likely to succeed. That is a matter as to which those who make the decisions under the appropriation have to take into account when they decide the method they use to spend money to achieve it.
GLEESON CJ: How long do you think you will need to complete your submissions?
MR BENNETT: I would think, your Honour,
probably an hour and a half to – an hour and a half I would think, perhaps
a little longer.
GLEESON CJ: We will adjourn until
10.15.
AT 4.17 PM THE MATTER WAS ADJOURNED
UNTIL
TUESDAY, 30 AUGUST 2005
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