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Tuesday, 24 June 2008
Page: 3146

Senator BRANDIS (1:24 PM) —The Judiciary Amendment Bill 2008 amends the Judiciary Act 1903 to permit the states and territories to provide for time limitations and notice requirements in respect of actions for the recovery of constitutionally invalid taxes in the federal jurisdiction. The bill is a response to the decision of the High Court in 2003 in the case of British American Tobacco v Western Australia, which involved proceedings in the federal jurisdiction for the recovery of invalid taxes paid under Western Australian law. The court held that provisions in Western Australian law containing a special notice requirement and limitation period for actions against the Crown in right of the state of Western Australia were not applied in the federal jurisdiction by section 79 of the Judiciary Act. The bill amends the act to allow the states and territories to apply time and notice limitations in actions to recover amounts paid under an invalid tax and to bar suits on the ground that the person bringing the suit has charged someone else for the amount of the tax.

While one naturally sympathises with corporations and individuals who have been subjected to invalid state taxes and would not seek to impede the recovery of those amounts, the reality is that the scenario is usually one of an invalid excise. It is not unreasonable to expect that objections to these taxes would be brought promptly, and it would be unjust to require the refund of amounts that have been fully passed onto consumers. That would be tantamount to a double subsidy to claimants funded by the public, first as consumers and then as taxpayers.

The matter of bringing repeal legislation was agreed between the Howard government and the states through the Standing Committee of Attorneys-General. The bill is in identical form to one that was drafted under the previous government, and it accordingly has the support of the opposition.