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Monday, 30 August 1993
Page: 486


Senator HILL (Leader of the Opposition) —I give notice that, on the next day of sitting, I shall move:

  (1)That the following matter be referred to the Standing Committee on Legal and Constitutional Affairs, for inquiry and report by 15 September 1993:

  The constitutional validity of the provisions of the Taxation (Deficit Reduction) Bill 1993.

  (2)That during the inquiry particular reference be paid to, and answers be prepared in relation to, the following matters:

  (a)in relation to section 55 of the Constitution:

    (i)whether the bill if enacted would be a law imposing taxation for the purposes of this section;

    (ii)if the bill would be a law imposing taxation, whether the bill deals only with that imposition or whether it deals with any matter other than the imposition of taxation;

    (iii)if the bill would be a law imposing taxation, and the committee considers that the bill may be in breach of the requirement that the bill deal only with the imposition of taxation, what options are available to the Senate in its consideration of the bill;

    (iv)if the bill would be a law imposing taxation, whether it deals with one subject of taxation only; and

    (v)if the bill would be a law imposing taxation, and the committee considers that the bill may be in breach of the requirement that the bill deal with one subject of taxation only, what options are available to the Senate in its consideration of the bill; and

  (b)in relation to section 53 of the Constitution:

    (i)whether the bill is a proposed law imposing taxation for the purposes of this section;

    (ii)if the bill is a proposed law imposing taxation, what options are available to the Senate in its consideration and possible amendment of the bill; and

    (iii)if the bill is not a proposed law imposing taxation, and if amendments are proposed, what options are available to the Senate in its consideration and possible amendment of the bill; and

  (c)if the bill would not impose taxation, whether the drafting practice of placing in a single bill amendments to several Acts dealing with taxation facilitates or obstructs the Senate's proper consideration and debate of the amendments to those several Acts, and whether such a practice should be followed in future.

  (3)That the terms of reference of the inquiry be advertised in the press in the usual way, but consistent with the short time frame for reporting.

  (4)That written submissions be sought and examined by the committee and oral evidence be heard in public, including oral evidence from the authors of the most important submissions.

I seek leave to make a brief statement in relation to this notice and to table two opinions, which I have shown to the Leader of the Government in the Senate.

  Leave granted.


Senator HILL —I table two opinions that I have just obtained which will be relevant to honourable senators' consideration of the notice of motion that I have just given. The first is a joint opinion from Mr Anthony J.H. Morris QC and Mr Liam F. Kelly of the Queensland bar. I will read simply the conclusions of their opinion:

For the reasons . . . in this Opinion, we have reached the following conclusions:

(1)The Taxation (Deficit Reduction) Bill 1993 will, if enacted, constitute a law "imposing taxation", and there is no substance in the argument that the Bill (if enacted) will not impose taxation, but merely increase the rates of taxation eligible under existing legislation.

(2)The Bill (if enacted) will not "deal with one subject of taxation only", and again there is no substance in the argument that the requirements of the second paragraph of Section 55 are satisfied because the effect of the Bill (if enacted) will be to amend a number of principal Acts, each of which deals with one subject of taxation only; and

(3)For those reasons, if the Bill is enacted in its present form, it will be invalid.

I will read one more paragraph. They say:

It is important, in our view, to emphasise the consequences of invalidity. If the Bill is struck-down by the High Court of Australia by reason of non-compliance with Section 55 of The Constitution, that will have the effect that all of its provisions cease to be operative. The invalidity of the Bill will not only affect those of its provisions which seek to impose a higher burden upon taxpayers; it will also result in the striking-down of those provision which are intended to reduce the burden on taxpayers, or to confer other benefits or concessions upon taxpayers.

Therefore, the opinion of Mr Morris QC unambiguously is that if the Senate passes this bill and if it is passed in the other place and becomes law, it will be attacked in the High Court of Australia and will fall, with the disastrous consequences presumably that some time next year all of the provisions contained in that bill will cease to be operative.

  Senator Schacht—How much did you pay for these, Hilly?


Senator HILL —The second opinion is—

  Opposition senators interjecting


The PRESIDENT —Order! I have said many times that proper titles should be used, Senator Schacht.


Senator HILL —I take the objection because I think that sort of offensive comment should be on the record. Rather than facing up to its responsibilities, all we get from this government is abuse and more abuse.

  The second opinion is from the highly regarded constitutional expert Professor Colin Howard. Again I mention only a few paragraphs of his opinion because obviously it has to be studied carefully. In paragraph 11 of his opinion, he says:

I conclude therefore that wherever the Bill increases a tax rate, which it does in clauses 12, 70, 71, 72, and 85, it seeks to impose taxation.

The next question he asks is:

Does the Bill deal with other matters?

Yes.

The next question he asks is:

What is rendered ineffective?

I will simply move to the last part of his advice, which states:

. . . if in the present case the tax increases were held to be impositions of taxation—

which he believes they will be—

both the increases themselves and ancillary provisions necessarily dependent on them would simply be invalidated without consequential effects on the principal Acts.

In other words, this act would fall as a whole. This is worth noting, and perhaps Senator Schacht might even been interested in this. He goes on:

This may well cause the government to reconsider the whole Bill, for as a matter of policy the provisions that in one way or another reduce taxation are no doubt dependent in a different sense on the tax increases.

Mr President, I table that opinion also.

  In giving this notice today, I seek that the Senate Standing Committee on Legal and Constitutional Affairs address this very serious issue because, on the basis of the opinions that I have tabled, the government is asking us to enact legislation that is not only potentially invalid but also, according to these learned gentlemen, likely to be found invalid with the dire consequences that would flow from that. It seems to me that not only should the Senate be persuaded by that to certainly take the reference to its committee for further consideration, but that the government should also take away these opinions, study them carefully and act appropriately as a result of them.

  I understand, from speaking to Senator Spindler, who I think has been delegated responsibility on behalf of the Australian Democrats, that the Australian Democrats will be supporting the motion in the terms that I have put. Senator Coulter nods his head, so I think that is further confirmation. Therefore, the Senate will take this reference and no doubt will take more learned advice. But what the government has sought to impose not only on the processes of the parliament but also on the people of Australia is extremely worrying.

  In one more minute, Mr President, I will tell you what the government has done because it is worth understanding. The proper course of action was to bring each of these impositions of tax separately to the parliament. But in an unprecedented way the government linked together the impositions of tax with the other so-called benefits that it was giving by virtue of the budget, for the one purpose of making it difficult for this parliament to object to and vote down the tax increases. But in doing that the government was too smart by half because it would appear that it has run foul of section 55 of the constitution and put at risk the whole of the package that is contained within that Taxation Deficit Reduction Bill with all the consequences that would flow from it. That is what the government has sought to do. It ought to be condemned for that. I trust that the Senate will take this reference.