Australians Taxation Pape v Commissioner

Question: Discuss about the Australians Taxation Pape v Commissioner. Answer: Introduction Pape versus Commissioner of Taxation was raised by Bryan Pape, a barrister and law lecturer. The plaintiff represented himself in court. Essentially, Pape challenged the statutory validity of the Tax Bonus for Working Australians Act (No. 2) 2009. Particularly, he challenged the legislation with the view that the proposed bonus payments were essentially a gift. Thus the payments did not follow the stipulated taxation power of the countrys constitution. However, the commonwealth maintained that the law was sustained by a mix of the appropriations power as stipulated in section 81 of the constitution (Tax Bonus 2009), the trade of commerce, taxation and implied nationhood power Background of the Act The Commonwealth offered the Australian government a grant to initiate a stimulus program that would regulate the economy from falling into a period of recession during the worldwide economic crisis of 2008. Consequently, the Tax Bonus for Working Australians Act (No 2) 2009 (Cth) was initiated (Tax Bonus Act 2009). According to the law, the official should pay the bonus to qualified individuals. However, the receiver must be an individual who has been a resident in the country for taxation purposes. In addition, the individual must have a tax liability. Typically, the eligible taxpayers are those who paid income tax during the 2007-2008 financial year, after considering the accessible tax credits. In addition, the taxpayers must have a taxable income of $100,000 or less (Tax Bonus 2009). Primarily, the total payment is dependent on the individuals earnings for that period. The Court Case The plaintiff, Pape, was eligible to obtain a payment of $250 as a bonus under the Act. However, he issued the court a writ for declarations that the disbursement of the bonus and the tax bonus Act were unconstitutional. For this reason, he believed that disbursements of the bonus were void and unlawful. In addition, Bryan Pape wanted an order to restrain the payments of the tax bonus payments to him (Pape v Commissioner 2009). The respondents to the case comprised of the commissioner of taxation and the Commonwealth. During the case, the South Australia, New South Wales, and Western Australias Attorney-Generals intervened. Remarkably, Mr. Pape represented himself. The hearing commenced as from March 30th to 1st April 2009 (Kate 2009). In the course of the writ, a special case was prepared. In that particular case, four questions were stated for the consideration of the court. Other Laws and Acts Relating to the Case Tax Bonus for Working Australians Act. Essentially, this Act instructs that the responsible official must offer a tax advantage to qualified individuals as specified in article 5 of the constitution. However, the payment is conditional to the fact the taxpayer must be an individual who resides Australia with an adjusted tax liability of more than zero but less than $100,000 (Pape v Commissioner 2009). The Executive Power of the Commonwealth. Primarily, these powers are conferred under section 61 of the constitution. According to the Act, the scope of this authority comprises of those powers granted to the institution by sanctions and statutes of the office. By and large, executive power exists to sustain policymaking activities suitable to the authority of the institution as a national body. It is worth noting that section 61 gives the executive the authority to provide instant fiscal stimulus to prevent economic crisis. Taxation Power. Predominantly, these powers are laid out in section 51 of the countrys constitution, where the powers of the Commonwealth are enumerated. Additionally, the constitution clearly outlines that the overall power of the Commonwealth to impose taxation must be carried out with respect to section 51 which confers enumerated powers subject to the law of the land. The Concept of Breach By and large, the writ was founded on the basis that most aspects of government spending are not allied to any form of Commonwealth legislative power. For this reason, the plaintiff believed that there was a breach of the constitution as regards to the taxation power, the implied nationhood power, and even the trade of commerce power (Bran Pape 2009). However, the high court judge believed that refuting the supremacy of the institution to finance this program as stated in section 81 of the Australian law would be the beginning of rendering the regime numb (Tax Bonus 2009). According to article 81, all money received and collected by the commonwealth should be transferred to a Consolidated Revenue Fund (Tax Bonus Act 2009). In turn, the consolidated fund is to be disbursed for accountabilities of the institution according to the form and conditional to the liabilities and charges created by the nations constitution. In the same way, Section 83 stipulates that no funds should be withdrawn from the treasury of the institution apart from those provisions made by the law. With respect to section 81 of the constitution, the institution argued that the law grants it the legislative power to make laws for appropriating money. In addition, it suggested that the parliament's authority to institute regulations for appropriating funds was unrestricted. In Contrast, Pape argued that the Appropriation Act gives no imminent authority to expend the available funds. Additionally, he portends that the Appropriation act is merely a constitutional requisite and a procedural regulation aimed at guaranteeing acquiescence with the fundamental principle of an accountable government (Dollery Grant 2010). For this reason, the policymakers must get approval from the regime before it can receive the appropriated money. In this regard, the Appropriation Act omits the exclusion that prohibits policymakers from withdrawing reserves from the appropriated fund. In addition, the Mr. Pape debated that the funds that were to be disbursed to eligible persons as a gratuity were not lawfully paid out from the Consolidated Revenue Fund, considering the provisions given under section 83. He also claimed that although there was a payment made by the law, it was not appropriated for the purpose of the nation. It is thus, worth pointing out that the plaintiff maintained a reasonable argument concerning the invalidity and validness of the provisions made by the government. Nonetheless, the high court affirmed that the appropriation and disbursements of the tax bonus were lawful and valid under the countrys constitution (Appleby McDonald 2011). Analysis of the Courts Decision Upon submission of the writ by Mr. Pape, the participants conceded on submitting four questions to the presiding court for resolution. This was made by means of a special case. The first order pertained to whether Mr. Pape had the right to pursue the relief indicated in his statement of claim and summons. Secondly, the questions tried to determine if the tax bonus was valid given that it was reinforced by various implied and express heads of statutory power under the nations constitution (Bryan Pape 2009). The third question sought to determine if the imbursement of the bonus that the Mr. Pape was eligible for according to the law was in accordance with a lawful appropriation under the Australian constitution. Finally, the last order wanted to determine the party that would pay the expenses of the case at hand (Bryan Pape 2009). With regards to the first question, the Commonwealth agreed that the plaintiff had the standing to contend that the money appropriated to him was improper. Conversely, they insisted that he lacked the adequate special interest to dispute the far-reaching matter that the Act was illegal in disbursing payments to other individuals (Williams 2009). For this reason, all court members rejected the proposal. As such, the courts realization that the payment to the plaintiff was void since the Act was void would be referred to in any following cases regarding the lawfulness of the rule. Thus, all judges decided that the plaintiff had the right to pursue a statement of invalidity (High Court Reasons 2009). On question two, a majority of the court members maintained the view that the Act was a legal law in the country. In their argument, they referred to section 51 as being a guiding tool for the application of the Commonwealth Governments policymaking power with respect to section 61 (High Court Reasons 2009). As for the third order, the plaintiff portended that the funds disbursed to the countrys residents in accordance with the law had not been made from the required fund as per the law. In addition, he reasoned that even the appropriation was made as per the Act, it was not a disbursement for the benefit of the Commonwealth. Besides, section 81 explicitly directs that all moneys and revenues collected or raised by the Commonwealth Government are to be put into one consolidated revenue fund (High Court Reasons 2009). These funds are to be made for the benefit of the institution subject to liabilities and controls laid out in the constitution (Eskerie 2012). Regardless of the plaintiffs justifications, the court maintained that the appropriation of the tax bonus was made as directed by the law. They justified their argument with respect to article 3 which has the consequence of transforming the payment rule into a taxation rule (Bryan Pape 2009). In this regard, the Act amplified the sum of funds to be cashed out from the Consolidated Revenue Fund under the prevailing stipulations. By and large, this was adequate to satisfy the demands indicated in article 81 of the countrys constitution. Even so, the court maintained that sections 81 and 83 did not authorize any form of spending, but they necessitate that such expenditures by the government be sanctioned by the Australian parliament (Appleby McDonald 2011). To cater for the last question, it was agreed that there was no order for costs related to the special hearing. Thus, there were no charges conferred to either party in the case. Owing to the factors mentioned above, the court ruled that the Act was a binding rule in the country. As such, the Act authenticates the appropriation of the stipulated funds or adjusted tax liability to eligible taxpayers within the country. It is also crucial to note that even though the judges unanimously agreed in favor of the tax bonus, they rejected the institutions point of view pertaining to various factors (Blackshield Williams 2009). By a majority, the judges failed to agree on the institution's principal argument that the legislature may sanction a regulation necessitating a payment and controlling the factors that are to be satisfied before they are made. In addition, they disputed the bodys argument that the executive has implied and express power to disburse any money lawfully appropriated. The judges also believed that the Commonwealth misinterpreted section 81 of the constitution (Blackshield Williams 2009). Notably, they disputed the idea that article 81 is an approval to the legislature of the mandate to allocate the appropriated money for any use it deems suitable (McLeod 2009). For this reason, it is trivial to discern that the unanimous decision by the high court was restricted by the fact that rendering Mr. Papes tax bonus invalid would render the entire tax Bonus Act invalid by implication. Specifically, such a decision would have been the beginning of the stultification of the power of the government (Hogg Lawson 2009). The judges were merely concerned with the idea that granting Mr. Papes wishes would bear significant implications for future government programs of the same caliber. Such a ruling would be used as a precedent in preceding cases, rendering the governments powers numb. Besides, the final decision made by the judges neglects the fact that the Commonwealth lost in all the primary submissions. In this regard, the ruling was made despite the fact that the executive could not justify its power to make impugned expenditure (Kerr 2009). References Appleby, J. McDonald, S 2011, The Ramifications of Pape v. Federal Commissioner of Taxation for the Spending Power and Legislative Powers of the Commonwealth, SSRN, retrieved 13 January 2017, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1864245 Australian Government Solicitor, 2009, High Court reasons for the Pape decision on the Tax Bonus Act, retrieved 15 January 2017, https://www.ags.gov.au/publications/express-law/el101.pdf Blackshield, T, Williams, G, 2009, Australian Constitutional Law and Theory, the Federation press. Eskerie, K 2012, Pape, Williams and the rules of standing, Sparke Helmore, retrieved 15 January 2017, https://www.sparke.com.au/insights/pape-williams-and-the-rules-of-standing/ Federal Register of Legislation, 2009, Tax Bonus for Working Australians bill (No. 2) 2009 Tax bonus for working Australians (consequential amendments) bill (No. 2) 2009, retrieved 15 January 2017, https://www.legislation.gov.au/Details/C2009B00019/Explanatory%20Memorandum/Text Grant, B, Dollery, B, Constitutionalism, Federalism and Reform? Pape v Commissioner of Taxation Anor- A conversation with Bryan Pape Public policy, vol. 5, no.1, pp. 2-9. Hannon, K 2009, Lawyer wants federal spending audited, the Age, retrieved 13 January 2017, https://www.theage.com.au//breaking-news-national/lawyer-wants-federal-spending-audited-20090708-dd40.html High Court of Australia, Bryan Reginald Pape V the Commissioner of Taxation Of The Commonwealth of Australia Anor [2009] HCA 23, retrieved 15 January 2017, https://www.hcourt.gov.au/assets/publications/judgment-summaries/2009/hca23-2009-07-07.pdf Hogg, M, Lawson, C 2011, The watershed for Commonwealth appropriation and spending after Pape and Williams?, Griffith University, retrieved 15 January 2017, https://www98.griffith.edu.au/dspace/bitstream/handle/10072/62724/95823_1.pdf;sequence=1 Kerr, D, 2009, Pape v Commissioner of Taxation: Fresh Fields for Federalism, Public Lecture, Qut Faculty of Law, 11November 2009. Pp. 2-12, November 11 2009. McLeod, A 2009, The Executive and Financial Powers of the Commonwealth: Pape v Commissioner of Taxation, Sydney University, retrieved 15 January 2017, https://sydney.edu.au/law/slr/slr_32/slr32_1/McLeod.pdf News.com, 2009, Kevin Rudd's bonus in Bryan Pape High Court challenge, retrieved 15 January 2017, https://www.news.com.au/finance/money/high-court-to-rule-on-900-cash-bonus/news-story/3c706f48271c26056fb6b81c69689b50 Pape v Commissioner of Taxation [2009] HCA 23 Tax Bonus for Working Australians Act (No. 2) 2009 (Cth). Williams, G 2009, Bryan Pape and his legacy to the law, retrieved 15 January 2017, https://www.tpdlaw.com.au/assets/articles/Bryan_Pape_and_his_Legacy_to_the_Law.pdf