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Funding chaplains is unconstitutional -

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TONY JONES, PRESENTER: The Prime Minister has declared he wants the school chaplaincy program to continue despite a High Court ruling that funding of the scheme is invalid.

It's the second time the High Court has knocked over the $250 million program and another victory for Toowoomba father of six Ron Williams, an avowed atheist who opposes the placement of religious counsellors in government schools.

As Kerry Brewster reports, the decision casts doubt on the funding of many other government programs.

KERRY BREWSTER, REPORTER: Ron Williams says someone had to do it. The singer-songwriter's second self-funded High Court challenge to the school chaplains program ended today with judges unanimously deciding that the funding of the program was invalid because the Commonwealth was acting beyond its constitutional capacity.

RON WILLIAMS, PLAINTIFF: I'm extremely pleased at today's result and I'm pleased 'cause of what has become the thousands and thousands of parents across Australia who have been agonising over this program since its inception.

KERRY BREWSTER: The Howard Government put chaplains in government schools in 2006.

Ron Williams' first victory in 2012 saw the High Court rule the program wasn't funded lawfully, prompting the Gillard Government to rush through legislation to rescue not just the chaplaincy scheme, but hundreds of other government programs.

So Ron Williams challenged again.

ANNE TWOMEY, SYDNEY LAW SCHOOL: This case wasn't about whether it's a good thing or a bad thing to fund chaplaincy in schools. It was really about the federalism issue, and that is, who has the power to make laws about chaplaincy in schools and the funding of chaplaincy. And the High Court found that the Commonwealth just doesn't have that power. If the power exists, the states have it.

KERRY BREWSTER: The Prime Minister, Tony Abbott, says the Government will examine ways to ensure chaplains remain in nearly 3,000 schools.

TONY ABBOTT, PRIME MINISTER: We particularly want the chaplaincy program to continue because it's one that we invented, it's one that we supported, it's one that we took to the election, but we have to look at the decision, see exactly what its ramifications are and then we'll be in a better position to respond.

KERRY BREWSTER: The head of Scripture Union has called on the Government to find another way of providing its pledged $244 million over four years.

PETER JAMES, SCRIPTURE UNION: We now look to the Commonwealth for an alternative funding solution. That could well be a system of grants via the states and territories, an alternative which the High Court acknowledged was possible in 2012 and again in the course of this hearing.

KERRY BREWSTER: Anne Twomey believes the idea of funding the chaplaincy program via grants to the states may well undo Ron Williams' win.

ANNE TWOMEY: So it may be the case that Mr Williams, although having won a great constitutional victory, it's a Pyrrhic victory for him because the chaplains may still survive in the school.

KERRY BREWSTER: Lawyers are scrambling to understand how the decision will effect hundreds of other Commonwealth-funded projects and programs.

ANNE TWOMEY: Most of those programs are probably OK. Some of them are vulnerable, and if you do get another Mr Williams or a Mr Pape or someone else is willing to challenge and who succeeds, yes, you could knock down all sorts of different forms of funding.

KERRY BREWSTER: But the man who believes passionately in the separation of church and state has laughed off the idea of ever going back to the High Court.

RON WILLIAMS: I can assure you I'm no serial High Court attender.

KERRY BREWSTER: Kerry Brewster, Lateline.