• The impact of this case on ATO policy is discussed in Decision Impact Statement: Roy Morgan Research Pty Ltd v Commissioner of Taxation (M177 of 2010).

ROY MORGAN RESEARCH PTY LTD v FC of T & ANOR

Court:
Full High Court

MEDIA NEUTRAL CITATION: [2011] HCA 35

French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel AND Bell JJ

In
Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation ^[1] 2010 ATC ¶ 20-184 (2010) 184 FCR 448 . , the Full Court of the Federal Court (Keane CJ, Sundberg and Kenny JJ), on an " appeal " under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth), upheld the validity of the Superannuation Guarantee (Administration) Act 1992 (Cth) ( " the Administration Act " ) and the Superannuation Guarantee Charge Act 1992 (Cth) ( " the Charge Act " ).

2. By special leave, the appellant appeals to this Court against that decision. The appellant submits, inter alia, that the only available head of power to support the legislation is s 51(ii) of the Constitution, and that the superannuation guarantee charge ( " the Charge " ) provided for in the legislation is not a tax because it is not imposed for " public purposes " . For the reasons which follow, the constitutional challenge to the Administration Act and the Charge Act in this Court fails and the appeal should be dismissed.

The legislation

3. Broadly speaking, the effect of the legislation under challenge is that if, as specified in the Administration Act, an employer fails to provide to all employees a prescribed minimum level of superannuation then any shortfall represented by failure to meet that minimum level in full, becomes the Charge. This impost is levied on the employer by the Charge Act. The amount of the Charge is a debt due to the Commonwealth and payable to the respondent, the Commissioner of Taxation: Taxation Administration Act 1953 (Cth), Sched 1, s 255-5. The Charge includes a component for interest and an administration cost. The result is to supply an incentive to employers to make contributions to superannuation for their employees without incurring a liability to the Commissioner for the Charge.

4. The revenue raised by the Charge is dealt with as " public money " to which Pt 3 (ss 8-16) and Div 2 of Pt 4 (ss 26-27) of the Financial Management and Accountability Act 1997 (Cth) apply. This reflects the operation of s 81 and s 83 of the Constitution. Section 81 states:

" All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution. "

Section 83 provides that money is not to be drawn " from the Treasury of the Commonwealth except under appropriation made by law " .

5. As the Full Court noted, in providing separately for the Charge Act and the Administration Act, the Parliament followed the well-established procedure to comply with the requirement of s 55 of the Constitution that laws imposing taxation shall deal only with the imposition of taxation ^[2] (2010) 184 FCR 448 at 452 . See also Northern Suburbs General Cemetery Reserve Trust v The Commonwealth 93 ATC 4118 (1993) 176 CLR 555 at 585; [ 1993 ] HCA 12 ; Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vict) (2004) 220 CLR 388 at 407-412 [ 38 ] - [ 50 ] ; [ 2004 ] HCA 53 . . Thus the Charge Act does no more than impose what is said to be a tax and fix the rate. It is the Administration Act which deals with the incidence, assessment and collection of the Charge. Section 3 of the Charge Act states that the Administration Act is incorporated and to be read as one with the Charge Act.

6. In the argument advanced in this Court by the appellant, an attempt was made to draw support from the linkage between the Charge Act and the Administration Act for the proposition that the Charge Act is not what otherwise it obviously appears to be, namely, a law imposing taxation which complies in form with s 55 of the Constitution, and is not a law supported by s 51(ii).

7. In response, the Attorney-General of the Commonwealth, the second respondent, referred to the rejection of a similar argument in
Logan Downs Pty Ltd v Federal Commissioner of Taxation ^[3] (1965) 112 CLR 177 at 186; [ 1965 ] HCA 16 . . That argument had emphasised the association between the laws imposing taxation ^[4] Wool Tax Acts (No 1)-(No 5) 1964 (Cth). and the separate provisions for administration made by the Wool Industry Act 1962 (Cth). These required any wool broker who sold shorn wool for another to pay the tax imposed by the taxation laws and authorised recoupment of an amount equal to the tax paid by retention out of the proceeds of sale or by recovery from the purchaser of the wool. Barwick CJ, Kitto, Taylor, Menzies and Windeyer JJ ^[5] (1965) 112 CLR 177 at 186-187 . observed that the submission by the plaintiff invited an inference that the taxing legislation had been enacted to raise money to increase the Consolidated Revenue Fund with a view to making partial provision for the appropriations thereout to support the operations of the Australian Wool Board. Their Honours then said ^[6] ((1965) 112 CLR 177 at 187 . :

" However, even to draw this inference would not lead to the conclusion that the Wool Tax Acts were not laws with respect to taxation. It would do no more than reveal why Parliament had imposed the taxation in question. "

8. In that regard, it should be added that Pt 8 (ss 63A-71) of the Administration Act is headed " Payments of amounts of shortfall components for the benefit of employees " . Part 8 applies to a charge payment in respect of the benefiting employees which is made by or on behalf of an employer (s 63A(1)). Section 63B is headed " Overview of this Part " and states that if a payment to which Pt 8 applies is made, the Commissioner is required to pay or otherwise deal with an amount called " the shortfall component " for the benefit of benefiting employees, as provided in ss 65-67. The " shortfall component " , in general terms, is the lesser of the amounts paid by the employer as the Charge, and the amount of employee entitlement calculated at the time the payment was made (s 64A, s 64B).

9. The Commissioner is obliged by Pt 8 to deal with this shortfall for the benefit of the employee by payments, directly to an employee aged 65 years or more and to an employee who has retired due to permanent incapacity or invalidity (ss 65A and 66); or to the legal personal representative of a deceased employee (s 67). Otherwise, the Commissioner is to deal with the shortfall by payment to a retirement savings account, an account with a complying superannuation fund or an account with a complying approved deposit fund, which in each case is held in the name of the employee and that is determined by the Commissioner to belong to the employee (s 65). Amounts which the Commissioner is required to pay under Pt 8 are payable out of the Consolidated Revenue Fund (established by s 81 of the Constitution). This is appropriated in accordance with s 83 of the Constitution by the standing appropriation made by s 71 of the Administration Act.

The appellant ' s case

10. The Full Court held (and this conclusion is not challenged by the appellant) that Pt 8 of the Administration Act is supported at least by the provision in s 51(xxiii) of the Constitution for the making by the Parliament of laws with respect to " invalid and old age pensions " ^[7] ((2010) 184 FCR 448 at 481 [ 98 ] - [ 100 ] . .

11. However, the appellant challenges the validity of the provisions made in the Administration Act and the Charge Act dealing with the Charge itself. It submits, first, that these provisions confer a " private and direct benefit " on the employees of those employers who pay the Charge and that this is effected by the compulsory transfer of money from the employers. The second submission is that by reason of the conferring of a private and direct benefit in this way, the Charge is not imposed for " public purposes " . The third submission is that an essential element for the characterisation of a " tax " is that it be imposed for " public purposes " . It follows, the appellant submits, fourthly and finally, that neither the Charge Act nor the Administration Act is a law with respect to " taxation " within the meaning of s 51(ii) of the Constitution, and that, there being no other head of supporting power to be found in s 51, the legislation establishing the Charge and providing for its administration is invalid.

12. The first and second submissions should not be accepted in an unqualified form, and, that being so, the final submission fails. In order to demonstrate why this is so, it is necessary to begin with some general considerations.

Taxation

13. The legislative power conferred by s 51(ii) is subject to the restriction in that paragraph " but so as not to discriminate between States or parts of States " . Of the term " taxation " as it appears in s 51(ii), Isaacs J said in 1908 that it was " a word so plain and comprehensive that it would be difficult to divine anything to surpass it in simplicity and amplitude " ^[8] R v Barger (1908) 6 CLR 41 at 82; [ 1908 ] HCA 43 . . Subsequently, in
The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd ^[9] (1922) 31 CLR 421 at 433-434, 443-445; see also at 459-461 per Starke J ; [ 1922 ] HCA 62 . See further Pape v Federal Commissioner of Taxation 2009 ATC ¶ 20-116 (2009) 238 CLR 1 at 44 [ 80 ] ; [ 2009 ] HCA 23 . , Isaacs J emphasised that the executive power does not extend to the levying of taxation and that this requires the exercise of legislative power.

14. There are a number of references in the Constitution to taxation, in addition to that in s 51(ii). Reference has already been made to s 55. Sections 53, 54 and 55 impose particular requirements upon the powers and procedures of the two Chambers of the Parliament with respect to laws and proposed laws imposing or dealing with the imposition of taxation. Failure to observe the requirements of s 55 brought down the legislation at issue in
Air Caledonie International v The Commonwealth ^[10] (1988) 165 CLR 462 at 471-472; [ 1988 ] HCA 61 . and
Australian Tape Manufacturers Association Ltd v The Commonwealth ^[11] (1993) 176 CLR 480 at 507-508; [ 1993 ] HCA 10 . . Section 114 is a prohibition directed both to the Parliaments of the Commonwealth and those of the States. Without the consent of the Parliament of the Commonwealth, a State may not impose any tax on property of any kind belonging to the Commonwealth; the Commonwealth, on its part, may not impose any tax on property of any kind belonging to a State.

15. Further, with respect to federal laws, s 51(xxxi) of the Constitution requires just terms for certain acquisitions of property. However, taxation stands outside the guarantee provided by s 51(xxxi) ^[12] Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 408; [ 1979 ] HCA 47 . . The result is that some laws which are held not to impose taxes nevertheless may be invalid by reason of s 51(xxxi). In Tape Manufacturers , the law under challenge was held not to be a law with respect to the acquisition of property but to be a law imposing taxation which nevertheless was invalid because there had been a contravention of s 55 of the Constitution.

16. It should be added that the discernment of a legislative objective to raise revenue is not necessarily a determinant that the exaction in question bears the character of taxation ^[13] cf Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 at 178 [ 90 ] ; [ 1999 ] HCA 62 ; Luton v Lessels (2002) 210 CLR 333 at 343-344 [ 13 ] ; [ 2002 ] HCA 13 . . For example, the objective of the imposition of a customs tariff at a high level may be to protect domestic industry by providing a disincentive to the importation of competing products. The point was made by Kitto J in
Fairfax v Federal Commissioner of Taxation ^[14] (1965) 114 CLR 1 at 12; [ 1965 ] HCA 64 . with reference to the statement in
United States v Sanchez ^[15] 340 US 42 at 44 (1950) . :

" It is beyond serious question that a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed.
Sonzinsky v United States ^[16] 300 US 506 at 513-514 (1937) . . The principle applies even though the revenue obtained is obviously negligible,
Sonzinsky v United States ^[17] 300 US 506 at 513-514 (1937) . , or the revenue purpose of the tax may be secondary,
J W Hampton [ Jr ] & Co v United States ^[18] 276 US 394 (1928) . . Nor does a tax statute necessarily fall because it touches on activities which Congress might not otherwise regulate " .

17. The notion expressed in various other taxation cases of " the purposes of the administration of Government " and variants thereof thus have to be understood as encompassing the considerations just mentioned.

Public purposes

18. This expression, upon which the appellant placed much emphasis for its argument, is used in various legal contexts. These include its use in statutory expressions designed to confer or preserve an immunity from rating and other revenue laws, and in expressions designed to limit the scope of powers of resumption ^[19] See for example, Lands Acquisition Act 1955 (Cth), s 5(1); Clunies-Ross v The Commonwealth (1984) 155 CLR 193 at 199-200; [ 1984 ] HCA 65 ; Griffiths v Minister for Lands, Planning and Environment (2008) 235 CLR 232 at 242-244 [ 23 ] - [ 34 ] ; [ 2008 ] HCA 20 . . But, as was indicated in
Griffiths v Minister for Lands, Planning and Environment ^[20] (2008) 235 CLR 232 at 242 [ 25 ] . , this statutory usage has reflected longstanding authority which treats " public purposes " as the purposes of the administration of government, a notion associated with the expressions " the use and service of the Crown " and of " the Public Service " .

19. These latter expressions were used in the United Kingdom and then in the Australian colonies ^[21] Pape v Federal Commissioner of Taxation 2009 ATC ¶ 20-116 (2009) 238 CLR 1 at 78-80 [ 198 ] - [ 202 ] . to identify charges by statute upon the Consolidated Fund. They were used, not as a limitation upon the activities of the executive branch of government, but to encompass the range of those activities it conducted from time to time, whether in exercise of the executive power itself, or in the exercise of functions conferred by statute ^[22] Pfizer Corporation v Minister of Health [ 1965 ] AC 512 at 533-534, 566-567 . . This particular source in United Kingdom and colonial constitutional practice should be kept in mind when considering the earlier authorities in this Court which link the expression " public purposes " to the constitutional conception of " taxation " . In particular, the phrase " public purposes " is not synonymous with " public interest " ^[23] cf Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 504-505 . .

20. Section 81 of the Constitution does not use the expression " public service of the Commonwealth " ; the phrase " the purposes of the Commonwealth " was preferred, so as to encompass the return of moneys to the States and thus to broaden, not narrow, the notions of " public service " and " public purposes " ^[24] Pape v Federal Commissioner of Taxation 2009 ATC ¶ 20-116 (2009) 238 CLR 1 at 41-43 [ 68 ] - [ 75 ] , 80-81 [ 203 ] - [ 204 ] , 86 [ 226 ] . .

21. Against this background it is not surprising that in
R v Barger ^[25] (1908) 6 CLR 41 at 68 . , Griffith CJ said:

" The primary meaning of ' taxation ' is raising money for the purposes of government by means of contributions from individual persons. " (emphasis added)

22. However, it became apparent in the early days of this Court that the necessary " purposes of government " might still be served where, pursuant to statute, the entity imposing, collecting and applying the proceeds of a tax was not the Commonwealth or a State itself.

23. The Municipal Council of Sydney, established and continued by the Sydney Corporation Act 1879 (NSW) and the consolidating statute, the Sydney Corporation Act 1902 (NSW) ( " the 1902 Act " ) respectively, was empowered to levy rates in respect of lands situated within the City of Sydney. Those lands included land which had become vested in the Commonwealth by operation of s 85(i) of the Constitution. It was unsuccessfully contended in The
Municipal Council of Sydney v The Commonwealth ^[26] (1904) 1 CLR 208 ; [ 1904 ] HCA 50 . that a municipal rate could not be a tax within the meaning of s 114 of the Constitution. The Court accepted the submission by the Commonwealth that the rates must be regarded as imposed by the State because the legislation operated as a permissible delegation of the taxing power of the State ^[27] (1904) 1 CLR 208 at 230, 234, 240 . . O'Connor J said ^[28] (1904) 1 CLR 230 at 240 . :

" [ Section 114 ] would, indeed, fall short of its object if it prohibited only taxation directly imposed by a State Act of Parliament, and left Commonwealth property open to taxation by a municipality or any other agency which the State Parliament might choose to invest with powers of taxation. But no such restricted interpretation is necessary or reasonable. The State, being the repository of the whole executive and legislative powers of the community, may create subordinate bodies, such as municipalities, hand over to them the care of local interest, and give them such powers of raising money by rates or taxes as may be necessary for the proper care of these interests. But in all such cases these powers are exercised by the subordinate body as agent of the power that created it. "

24. His Honour then referred to what had been said by Field J in
Meriwether v Garrett ^[29] 102 US 472 at 511 (1880) . with respect to the character of municipal corporations, as " mere instrumentalities of the State for the more convenient administration of local government " .

25. It should be noted that the rates levied and received by the Municipal Council of Sydney under the 1902 Act were raised " for the general expenditure of the city " (s 120(1)) and were to be paid not into the treasury of the State, but " into the office of the city treasurer " (s 120(2)). Hence, by parity of reasoning, it is not the case that an impost by federal law cannot be a tax unless it is received by the Commonwealth and so attracts s 81 of the Constitution ^[30] Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 503-504 . .

The excise cases - " public authorities "

26. Section 90 of the Constitution is directed to what otherwise might have been the concurrent powers of the Parliament of the Commonwealth and other Australian legislatures ^[31] Including those to be established for the Territories: Capital Duplicators Pty Ltd v Australian Capital Territory 93 ATC 5053 (1992) 177 CLR 248 ; [ 1992 ] HCA 51 . to impose particular forms of taxation, namely duties of customs and excise. Duties of customs must be uniform (s 88). Section 90 renders exclusive that power of the Parliament of the Commonwealth to impose duties of customs and excise and denies that competency to other legislatures. Many of the cases in which this Court has considered the nature of a law imposing taxation have concerned not federal but State laws. The issues that arose in those matters included, inter alia, whether the challenged impost answered the description of a tax and, if so, whether it answered the further description of a duty of excise.

27. The State laws successfully challenged in
Attorney-General (NSW) v Homebush Flour Mills Ltd ^[32] (1937) 56 CLR 390 ; [ 1937 ] HCA 3 . ,
Matthews v Chicory Marketing Board (Vict) ^[33] (1938) 60 CLR 263 ; [ 1938 ] HCA 38 . and
Parton v Milk Board (Vict) ^[34] ((1949) 80 CLR 229 ; [ 1949 ] HCA 67 . involved statutory marketing schemes. These established: in Homebush ^[35] ((1937) 56 CLR 390 at 409 . , a committee to fix price on flour consisting of a Minister, two officers of his Department, representatives of the flour mills and a representative of the master bakers; in Matthews ^[36] ((1938) 60 CLR 263 at 287 . , Marketing Boards constituted by one member, appointed by the Governor in Council and by others elected by producers of the commodity; and, in Parton ^[37] ((1949) 80 CLR 229 at 230, 239 . , a Milk Board, which was a body corporate, whose members were appointed by the Governor in Council.

28. The levy considered in Matthews was to be applied in work directed to the improvement of the quality of the commodity ^[38] ((1938) 60 CLR 263 at 269 . , in Homebush to the relief of necessitous wheat farmers ^[39] ((1937) 556 CLR 390 at 398 . , and in Parton for the provision of what were regarded by the legislature as benefits to those engaged in the milk industry ^[40] ((1949) 80 CLR 229 at 244, 254-255 . . In this setting, an issue was presented whether the statutory bodies had the character of public authorities sufficient to give to them the ability to impose, collect and expend moneys which had the character of taxes.

29. In each case it was held that the State legislation imposed a tax (and that this was an excise). This was so notwithstanding the intermediate role of the relevant committees and boards. In that regard, in Matthews , Dixon J ^[41] ((1938) 60 CLR 263 at 289 . remarked:

" The Chicory Marketing Board is a public authority constituted under the statute by the Executive Government of the State. It is true that s 8(4) provides that a board shall not be deemed to represent the Crown for any purpose whatsoever. But this simply means that it is not a corporate servant or agent of the Crown, so that nothing it does can impose any liability upon the Crown nor, on the other hand, can it claim any of the immunities of the Crown. "

30. In Parton ^[42] ((1949) 80 CLR 229 at 258 . , Dixon J said of the levy imposed upon " dairymen " that it was " clearly a tax " , adding:

" It is a compulsory exaction. It is an exaction for the purposes of expenditure out of a Treasury fund. The expenditure is by a government agency and the objects are governmental. It is not a charge for services. "

The Canadian decisions

31. In Homebush ^[43] ((1937) 56 CLR 390 at 393 . , counsel for the successful party, the defendant, cited as an authority indicating that which constitutes a tax, the recent decision of the Privy Council in
Lower Mainland Dairy Products Sales Adjustment Committee v Crystal Dairy Ltd ^[44] ( [ 1933 ] AC 168 at 172, 175, 176 . . The Privy Council held to be taxes the " adjustment levies " imposed as part of a dairy marketing scheme in British Columbia. This involved the fixing of levies by an " adjustment committee " created pursuant to statute, with one member appointed by the Lieutenant-Governor in Council and the other two by local dairy farmers. Their Lordships further held that these were indirect taxes and thus beyond the powers of the Province of British Columbia having regard to ss 91(3) and 92(2) of the British North America Act 1867 ^[45] 30 & 31 Vict c 3. .

32. Their Lordships noted, in reaching this conclusion ^[46] ( [ 1933 ] AC 168 at 175 . , that the adjustment levies were compulsorily imposed by a statutory adjustment committee, that they were enforceable by law and added:

" Their Lordships are of opinion that the Committee is a public authority, and that the imposition of these levies is for public purposes. Under s 22 the Lieutenant-Governor in Council has power to suspend the functions of a Committee, if its operations are adversely affecting the interest of consumers of milk or manufactured products, and the Committee is to report annually to the Minister and to send him every three months the auditor ' s report on their accounts (s 12, sub-s 2, and s 8A). The fact that the moneys so recovered are distributed as a bonus among the traders in the manufactured products market does not, in their Lordships ' opinion, affect the taxing character of the levies made. "

33. The Privy Council referred, with apparent approval, to what had been said by Duff J in the Supreme Court of Canada in
Lawson v Interior Tree Fruit and Vegetable Committee of Direction ^[47] ( [ 1931 ] SCR 357 at 362 . . The legislation of British Columbia, considered by the Supreme Court in that case, constituted a Committee of Direction with the exclusive power to control and regulate the marketing of all tree fruits and vegetables grown in a particular portion of that Province. Duff J said he had no doubt that the levies imposed by the Committee under the powers conferred upon it by statute were taxes. He noted that the levies were enforceable by law and imposed under the authority of the legislature by a public body, namely a Committee, the chairman of which was appointed by the Lieutenant-Governor in Council. The Committee was invested with wide powers of regulation and control over the fruit and vegetable industry. Duff J added ^[48] ( [ 1931 ] SCR 357 at 363 . :

" The levy is also made for a public purpose. When such compulsory, not to say dictatorial, powers are vested in such a body by the [ L ] egislature, the purposes for which they are given are conclusively presumed to be public purposes. "

34. It is apparent, when this reference to " public purposes " is understood with an appreciation of its provenance outlined earlier in these reasons, that Duff J had been concerned to emphasise that, notwithstanding the interposition by statute of the Committee of Direction, and the conferral of the power to impose the levies, the levies still answered the basal requirement that a tax be imposed for the purposes of government. The remarks set out above by Dixon J in Matthews and Parton are of the same tenor.

35. The Canadian authorities were cited in submission in Matthews ^[49] ((1938) 60 CLR 263 at 266 . and were taken up by Latham CJ ^[50] ((1938) 60 CLR 263 at 276 . , Rich J ^[51] ((1938) 60 CLR 263 at 281 . , Starke J ^[52] ((1938) 60 CLR 263 at 284 . and at length by Dixon J ^[53] ((1938) 60 CLR 263 at 289-291 . .

The usual description of a tax

36. In Matthews , Latham CJ cited what had been said by the Privy Council in
Lower Mainland Dairy Products Sales Adjustment Committee v Crystal Dairy Ltd ^[54] ( [ 1933 ] AC 168 at 175 . in support of the proposition that the levy by the Chicory Marketing Board was " plainly a tax " ^[55] ((1938) 60 CLR 263 at 276 . . His Honour added, in a sentence which has been repeated, but not always with acknowledgement of its derivation:

" It is a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered. " (footnote omitted)

37. The majority in Tape Manufacturers ^[56] ((1993) 176 CLR 480 at 501 . suggested that it is not essential to the concept of a tax that the exaction should be by a public authority. That suggestion would constitute a large and controversial step beyond what was said in Matthews . As the reasons of the majority in Tape Manufacturers show, whether that step could or should be taken depends, at least in part, upon what meaning would be given to the expression " non-public " authority if " one of its functions is to levy, demand or receive exactions to be expended on public purposes " ^[57] ((1993) 176 CLR 480 at 501 . . It was not necessary to decide that question in Tape Manufacturers and the majority in that case did not do so. Nor is it necessary in this case, given the addition of the proceeds of the Charge to the Consolidated Revenue Fund, to pursue that question, or any broader questions about whether it is essential to the concept of a tax that the exaction should be by a public authority.

38. Speaking of the " recoupment tax " imposed by the federal legislation considered in
MacCormick v Federal Commissioner of Taxation ^[58] 84 ATC 4230 ((1984) 158 CLR 622 at 639; [ 1984 ] HCA 20 . , Gibbs CJ, Wilson, Deane and Dawson JJ said ^[59] ((1984) 158 CLR 622 at 639 . :

" The exactions in question answer the usual description of a tax. They are compulsory. They are to raise money for governmental purposes. They do not constitute payment for services rendered: see
Matthews v Chicory Marketing Board (Vict) ^[60] ((1938) 60 CLR 263 at 276 . , per Latham CJ;
Leake v Commissioner of State Taxation ^[61] ((1934) 36 WALR 66 at 67-68 . , per Dwyer J. They are not penalties since the liability to pay the exactions does not arise from any failure to discharge antecedent obligations on the part of the persons upon whom the exactions fall: see
R v Barger ^[62] ((1908) 6 CLR 41 at 54 . , per Isaacs J. They are not arbitrary. Liability is imposed by reference to criteria which are sufficiently general in their application and which mark out the objects and subject-matter of the tax: see
Federal Commissioner of Taxation v Hipsleys Ltd ^[63] ((1926) 38 CLR 219 at 236; [ 1926 ] HCA 34 . . "

Their Honours added ^[64] ((1984) 158 CLR 622 at 640 . See also Air Caledonie International v The Commonwealth (1988) 165 CLR 462 at 467 . :

" For an impost to satisfy the description of a tax it must be possible to differentiate it from an arbitrary exaction and this can only be done by reference to the criteria by which liability to pay the tax is imposed. Not only must it be possible to point to the criteria themselves, but it must be possible to show that the way in which they are applied does not involve the imposition of liability in an arbitrary or capricious manner. "

39. The source of that last requirement was located by their Honours in what was said by Dixon CJ in
Deputy Federal Commissioner of Taxation v Brown ^[65] ((1958) 100 CLR 32 at 40; [ 1958 ] HCA 2 . See also Commissioner of Taxation v Clyne (1958) 100 CLR 246 at 258; [ 1958 ] HCA 10 . , namely that compliance with the Constitution requires that liability for tax be not imposed, without leaving open to the taxpayer some judicial process by which the taxpayer may show that in truth the tax was exigible or not exigible in the sum assessed.

40. The notion of " compulsory exaction " has received some refinement in the decided cases. The nature of a particular exaction or the end to which revenues raised might be put may be such as to take the exaction outside the constitutional conception of " taxation " . As s 53 of the Constitution itself recognises, a law does not impose taxation by reason only that it contains provisions for the imposition or the appropriation of fines or other pecuniary penalties, or for the demand or payment of fees for licenses, or fees for services. Further examples are provided by decisions in
Moore v The Commonwealth ^[66] ((1951) 82 CLR 547 ; [ 1951 ] HCA 10 ; cf Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 94 [ 255 ] . ,
Clyne v Federal Commissioner of Taxation ^[67] ((1958) 100 CLR 246 . ,
Airservices Australia v Canadian Airlines International Ltd ^[68] ((1999) 202 CLR 133 . , and
Luton v Lessels ^[69] 2002 ATC 4311 ((2002) 210 CLR 333 . .

41. In Moore , the money raised from each wool producer was to be applied in satisfaction of its assessed income tax or provisional income tax and otherwise was to be refunded to the producer; the laws in question were supported by s 51(ii) of the Constitution but did not themselves impose a tax so as to have required observance of s 55 by the Parliament ^[70] ((1951) 82 CLR 547 at 568-569, 576, 581-582 . . Likewise, it was held in Clyne that the liability to pay provisional tax was but ancillary to the liability to pay income tax ^[71] ((1958) 100 CLR 246 at 260-261 . .

42. The charges imposed on the airlines which were considered in Airservices Australia were examples of financial burdens placed upon " users " to fund the maintenance of public assets and the provision of public services. Finally, the scheme established by the two statutes considered in
Luton v Lessels provided a new mechanism for the enforcement of existing obligations to make child maintenance payments. The legislation did so by the substitution of a new obligation to the Commonwealth to be owed by the obligor and a new right against the Commonwealth owed by the obligee, measured by reference to the obligation which was terminated ^[72] 2002 ATC 4311 ((2002) 210 CLR 333 at 355 [ 60 ] . .

The present appeal - conclusion

43. The exaction represented by the Charge, contrary to the appellant ' s submission, is not of a nature which takes it outside the constitutional conception of " taxation " . None of the examples considered above are applicable here.

44. The legislation considered in the recent decisions which bears the closest analogy to the Charge Act and the Administration Act is that which was the subject of
Northern Suburbs General Cemetery Reserve Trust v The Commonwealth ^[73] 93 ATC 4118 ((1993) 176 CLR 555 . .

45. In that case, the Court upheld the validity of the Training Guarantee Act 1990 (Cth) and the Training Guarantee (Administration) Act 1990 (Cth). The legislation defined a minimum amount which the employer notionally was required to expend in the training of its workforce. A charge was imposed corresponding to the amount by which the actual expenditure on training by each employer fell short of that minimum amount; the employer was rendered liable to pay the amount of the shortfall to the Commissioner and thus into the Consolidated Revenue Fund; an equivalent amount was appropriated from the Consolidated Revenue Fund into a trust account which was expended on workforce training, in particular by payments made pursuant to agreements between the Commonwealth and the States.

46. The appellant in its submissions concerning Northern Suburbs emphasised that under the training guarantee scheme upheld in that case, and unlike the situation in the present case, there was no " linkage " in the sense of a requirement that funds collected under the charge be expended on training of the particular employees paying the charge.

47. That consideration was significant for the decision in Northern Suburbs but not in the way in which the appellant submitted. The absence of a requirement that moneys disbursed be expended upon eligible training programs by those employers who had incurred a liability to pay the charge was significant. This indicated an absence of a sufficient relationship between the liability to pay and the provision of employment related training, to warrant characterising the liability to pay the charge as a fee for services, or as something akin to a fee for services provided to that employer ^[74] ((1993) 176 CLR 555 at 568 . .

48. The Court in Northern Suburbs also emphasised a point made earlier in these reasons: that the raising of revenue is secondary to the attainment of some other legislative object is no reason for treating an impost otherwise than as a tax ^[75] ((1993) 176 CLR 555 at 569, 589 . . As Latham CJ pointed out in
Radio Corporation Pty Ltd v The Commonwealth ^[76] ((1938) 59 CLR 170 at 179-180; [ 1938 ] HCA 9 . , this is so even if the legislation is designed for the purpose of carrying out a policy affecting matters not directly within the legislative competence of the Parliament of the Commonwealth.

49. The submission by the appellant that the Charge is invalid because the legislation confers upon employees a " private and direct benefit " cannot be accepted. Nor does this " linkage " indicate that the Charge is not imposed by the Parliament for " public purposes " . It is settled that the imposition of a tax for the benefit of the Consolidated Revenue Fund is made for public purposes ^[77] Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 503, 522 . . That is not to say that the receipt of funds into the Consolidated Revenue Fund conclusively establishes their character as the proceeds of a tax. But it does establish in the present case that the Charge is imposed for " public purposes " and thus, if other necessary criteria are met, as they are in this case, the Charge is a valid tax.

50. Moneys received into the Consolidated Revenue Fund are available to be appropriated for any purpose for which the Parliament may lawfully spend money; this is so, whatever the purpose for which those moneys were raised ^[78] Moore v The Commonwealth (1951) 82 CLR 547 at 561 per Latham CJ, 572 per McTiernan J ; Parton v Milk Board (Vict) (1949) 80 CLR 229 at 258 per Dixon J ; R v Barger (1908) 6 CLR 41 at 82 per Isaacs J . . In the First Uniform Tax Case , Latham CJ explained ^[79] South Australia v The Commonwealth (1942) 65 CLR 373 at 414 . :

" It is doubtful whether Commonwealth revenue can be earmarked except at the point of expenditure (ie, not as revenue) by an appropriation Act …

All taxation moneys must pass into the Consolidated Revenue Fund (s 81), where their identity is lost, and whence they can be taken only by an appropriation Act. An appropriation Act could provide that a sum measured by the receipts under a particular tax Act should be applied to a particular purpose, but this would mean only that the sum so fixed would be taken out of the general consolidated revenue. Thus there can be no earmarking in the ordinary sense of any Commonwealth revenue. "

51. The case presented by the appellant appears to depend upon the proposition that payments of the Charge by an employer can be traced through the Consolidated Revenue Fund with the consequence that any payments made to employees under Pt 8 of the Administration Act are properly viewed as having come from the employer. That would involve earmarking of the very kind that the establishment of the Consolidated Revenue Fund (and its predecessors in the United Kingdom and the Australian colonies) was designed to prevent. When the Charge is paid by a particular employer into the Consolidated Revenue Fund, its identity is lost. The funds raised by the Charge are thereafter available under s 83 of the Constitution for an appropriation to be spent on any purpose for which the Commonwealth may lawfully spend money.

Orders

52. The appeal should be dismissed with costs.