Carbon tax – Unconstitutional?
The beginnings of a possible note
There are a number of possible reasons why the carbon tax might be regarded as unconstitutional.
Argument 1 – A Tax on State property?
Section 114 of the Constitution provides that:
114. A State shall not, without the consent of the Parliament of the Commonwealth, raise or
maintain any naval or military force, or impose any tax on property of any kind belonging to
the Commonwealth, nor shall the Commonwealth impose any tax on property of any kind
belonging to a State.
Two questions arise:
Is this a tax?
If so, is it a tax on property belonging to a State?
The charge is imposed by section 100(10). The legislation works by making it unlawful to do various
things with a “carbon unit” and the government makes a charge for these units.
(10) If a carbon unit is issued to a person in accordance with this section, the person is liable
to pay a charge for the issue of the unit.
If this charge amounts to taxation, then the main Act retreats, for section 100(11) provides:
(11) Subsection (10) has effect only so far as it is not a law imposing taxation within the
meaning of section 55 of the Constitution.
This is not the end of the issue, however, because there is other legislation predicated on the
possibility that the charge is a tax.
Is the Section 100(10) charge a tax?
Matthews v The Chicory Marketing Board (Victoria) (1938) 60 CLR 263: “a compulsory exaction of
money by a public authority for public purposes, enforceable by law, and not a payment for services
rendered”.
This charge is compulsory, in the sense that the wording is mandatory: “the person is liable to pay”.
The charge is not a payment for services rendered. No service is rendered at all.
Could it be argued by the Government that the charge is no more than a licence fee? This is unlikely
to help them, since a licence fee may also be a tax, as Mason J observed in the Pipelines Case in
1983:
There are many illustrations, notably in England, of fees charged for licences to carry on an
occupation which have been regarded as an excise (W. Harrison Moore, The Constitution of
the Commonwealth of Australia, 2nd ed. (1910), p. 515). This is because the fee was not
merely a fee for the privilege of carrying on a business or activity; it was also a tax upon
goods. Where the fee for a licence to sell a commodity is a lump sum that is small or
relatively small in amount it is easier to conclude that it is a fee for a privilege or that, if it be
a tax, it is not a tax on the commodity. Where, however, though the fee is expressed to be
for a licence to produce or manufacture, the terms and practical operation of the law show
that it is exacted in virtue of the quantity or value of units produced or manufactured, it is a
tax upon goods. (at p634)
However, the question of whether the main Act offends against the rule is the wrong question, for if
the charge is a tax, it is imposed, not by the main Act, but by the other Acts.
State Property
If the charge is an excise duty, then section 10 of the CLEAN ENERGY (CHARGES-EXCISE) BILL
2011provides that the Tax cannot be a tax on State property:
10 Act does not impose a tax on property of a State
(1) This Act has no effect to the extent (if any) to which it imposes a tax on property of any
kind belonging to a State.
(2) In this section, property of any kind belonging to a State has the same meaning as in
section 114 of the Constitution.
Thus, if it be successfully argued that the charge – or any application of it – is a tax on State property,
then the result is not that the whole edifice comes crashing down as unconstitutional, but that than
particular application dissolves away.
Analysis
Probably not as ground for challenge.
Argument 2 – The Legislation offends
against section 55 of the Constitution
Section 55 of the Constitution provides as follows
COMMONWEALTH OF AUSTRALIA CONSTITUTION ACT - SECT 55
Tax Bill
Laws imposing taxation shall deal only with the imposition of taxation, and any provision
therein dealing with any other matter shall be of no effect.
Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with
one subject of taxation only; but laws imposing duties of customs shall deal with duties of
customs only, and laws imposing duties of excise shall deal with duties of excise only.
The main Act probably offends against this principle, since this is probably a tax. But the point leads
nowhere, because the suite of legislation includes other Act which say and say only, in effect, “If the
charge is a tax, we hereby impose the tax”.
Analysis
Probably not as ground for challenge.
Argument 3 – Religious observance
Section 116 of the Constitution provides that
116 Commonwealth not to legislate in respect of religion
The Commonwealth shall not make any law for establishing any religion, or for imposing any
religious observance, or for prohibiting the free exercise of any religion, and no religious
test shall be required as a qualification for any office or public trust under the
Commonwealth.
Two questions arise:
Are the objects of this legislation essentially religious?
Does the charge amount to an imposed observance?
Are the objects of this legislation essentially religious?
It has been remarked many times recently that the essential nature of the warmist movement is
neo-religious in nature. Certainly, it is a different religion from traditional Christianity, but in terms
of its characteristics, it might well be said that it is no less religious in its nature than any other
religion current today. By way of examples1, see
Dark Green Religion; Nature Spirituality and the Planetary Future - Bron Taylor
Publisher’s material: In this innovative and deeply felt work, Bron Taylor examines
the evolution of “green religions” in North America and beyond: spiritual practices
that hold nature as sacred and have in many cases replaced traditional religions.
"Green Politics; A Religious Movement?" By Mike Moore, Former Prime Minister of New
Zealand, Former Director General of the World Trade Organisation2.
It’s finally happened. Green politics is officially a religion and deserves the rights of
other faiths. A British judge has determined that employees can take their
1
These are but a few examples, obtained by a few minutes pursuing Google hits on “green” and “religion”.
2
http://www.mike-moore.info/Green-Politics-A-Religious-Movement.html
employers to court on the grounds that they were discriminated against because of
their views on climate change. The Judge ruled that an employee’s green views
should be protected under legislation that makes it unlawful to discriminate because
of someone’s religious beliefs
The Green Religion by Miguel A. Guanipa3
the abrasive approach and militant tactics of many who fill the ranks of the
environmentally conscious have led me to believe that the movement has gradually
devolved into a kind of Religion
Green religion as science By Doug Casey4
It's not unfair or inaccurate to say the green movement has most, if not all of the
elements of a religion, and only a tenuous relationship with science.
The wording of the Act will put some wind into the sails of the challenge here. To talk – in an Act – of
carbon dioxide as a “pollutant” is palpable rhetoric; in objective terms, it is as nonsensical as saying
that water, or human beings, are pollutants. Similarly, the very name of the main Act “Clean energy”
is rhetoric; energy is energy. These features, of themselves, suggest that the legislation is
concerned, not with the business of secular government, but rather with the propagation of a neo-
religious doctrine.
Does the charge amount to an imposed observance?
Arguably, it does. It is certainly imposed, and the law suggests that fiscal compulsion 9is sufficient.
For example, in ATTORNEY-GENERAL (VICT.); EX REL. BLACK v. THE COMMONWEALTH [1981] HCA 2;
(1981) 146 CLR 559 :
To take an unlikely example, an Act which granted money to a State on condition that the
State would prohibit entirely the exercise of a particular religion would, in my opinion, be a
law for prohibiting the free exercise of that religion, and would be invalid.
A cynic would perhaps remark that the true purpose of the legislation is not so much the
propagation of the green doctrine, but rather the raising of tax under a blanket of piety. But to seek
to argue that such a feature deprives a movement of its essentially religious nature would be to
argue that many other well-recognised religions are not truly religions either.
Analysis
This is probably both the most powerful and the most problematic of the potential challenges. To
establish it would require – not just a dry analysis of a few words of legal formulation – but a head-
on analysis of the whole field. A finding by the High Court that this legislation is unconstitutional on
this ground would represent a seismic destruction of the whole of the government’s policy in this
area. If the court wants to derail the legislation, this would represent the most permanent way of
doing so. But if it does not, then the avenue would be hopeless.
3
http://www.americanthinker.com/2008/10/the_green_religion.html
4
http://www.wnd.com/index.php?pageId=10553