Decision impact statement

Albrecht & Ors v Commissioner of Taxation

• This decision has no impact for ATO precedential documents or Law Administration Practice Statements
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Venue: Federal Court of Australia
Venue Reference No: WAD 471-479 of 2013
Judge Name: Perram, Robertson & Griffiths JJ
Judgment date: 19 December 2014 (final orders made 28 January 2015)
Appeals on foot: No
Decision Outcome: Partly Favourable to the Commissioner

Impacted Advice

Relevant Rulings/Determinations:

• N/A

Subject References:
Constitutional Law
Melbourne Corporation principle
commissioned officers of Western Australian police force
members of constitutionally-protected superannuation schemes
whether Melbourne Corporation principle applies to invalidate superannuation contribution surcharge tax imposed on members
whether commissioned officers were at the higher levels of government for the purpose of the application of the Melbourne Corporation principle

Précis

Outlines the ATO's response to this case which concerns whether the Protected Funds Acts^[1], which imposed liability to pay superannuation contributions surcharge (surcharge), were invalid in their application to the appellants, commissioned officers of the Western Australian (WA) Police Force.

Brief Facts:

1. The appellants were nine commissioned police officers in the WA Police Force of various ranks (other than the Commissioner of the WA Police Force).

2. The respondent issued superannuation contributions surcharge assessments to the appellants under the Protected Funds Acts.

3. The appellants made applications to the Full Federal Court (Full Court) of Australia arguing the Protected Funds Acts breach the implied constitutional limitation as set out in Melbourne Corporation v The Commonwealth (1947) 74 CLR 31.

Issues Decided by the Court

1. Immunity of State Governments from federal regulation in areas of core constitutional significance.

The Full Court accepted that police officers perform an important and critical role in the maintenance of peace and order in the State and that this role may be described as having a constitutional aspect to it. However, the Full Court found that the surcharge had no impact upon the performance by the State of the policing function.

2. Class of individuals at the 'higher levels of government'.

The Full Court allowed the appeals to the extent they related to the liability of the appellants to pay the surcharge while they held the rank of Deputy Commissioner of Police (Operations), Deputy Commissioner of Police (Special Services) and Assistant Commissioner. The Full Court accepted these ranks to be 'high level statutory office holders'. The appeals were otherwise dismissed.

ATO view of decision

Issue 1

The Commissioner considers the decision of the Full Court on this issue is consistent with his understanding of and approach to this issue.

Issue 2

The Commissioner considers the decision of the Full Court does not alter the general legal principle provided by the High Court in Re Australian Education Union; Ex parte Victoria (1995) 159 CLR 192, with respect to the determination of individuals who are at the 'higher levels of government'. In the Commissioner's view the class of individuals at the 'higher levels of government' remains those persons who perform a role with a close relationship with the exercise of State constitutional power, including Governors and their assistants and advisors, Members of Parliament, Ministers and ministerial advisors, judges, magistrates and heads of public service departments or similar instrumentalities. Also included are certain statutory officers with high-level responsibilities such as Directors of Public Prosecutions, Commissioners of Police, Auditors-General and the like.

However, the Commissioner accepts that the Full Court decision has, in clarifying who are statutory officers with high-level responsibilities, extended the class of individuals he now accepts as falling within higher levels of government. The Commissioner accepts he should cease to apply surcharge in relation to contributions to constitutionally protected superannuation funds by:

•

holders of any of the offices specified under the Salaries and Allowances Act 1975 (WA), including the Western Australian Police rankings of Deputy Commissioner of Police and Assistant Commissioner and any other offices on that list

•

holders of any of the offices specified under similar independent remuneration determination legislation in other States

•

holders of the police rank of Deputy Commissioner and Assistant Commissioner of Police (or their equivalents) in all States.

Where existing surcharge assessments have been raised by the Commissioner pursuant to the Protected Funds Acts in relation to these persons, the Commissioner considers it is appropriate to amend these assessments to the extent that it is possible under the tax law, and treat the surcharge as not being applicable.

The Commissioner invites any taxpayers who have received superannuation surcharge assessments and consider they now fall within the extended class of individuals falling within higher levels of government as a result of the Full Court's decision in this case, to lodge an objection with the Commissioner, together with a request for an extension of time in which to lodge the objection. All objections will be decided in accordance with the Full Court's decision. For assistance with lodging an objection taxpayers can refer to the information located on our website at: www.ato.gov.au/general/dispute-or-object-to-an-ato-decision/object-to-an-ato-decision/

Administrative Treatment

Implications for impacted ATO precedential documents (Public Rulings and Determinations)

Not Applicable

Implications for impacted Law Administration Practice Statements

Not Applicable

Court citation:
[2014] FCAFC 176
(2014) 315 ALR 231

Footnotes

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth)

Legislative References:



Constitution
114

Constitution Act 1889 (WA)
2(1)

Income Tax Assessment Regulations 1997 (Cth)
Schedule 4

Industrial Relations Act 1979 (WA)
The Act

Native Title Act 1993 (Cth)
The Act

Police Act 1892 (WA)
5
6
7
8

Police Force Regulations 1979 (WA)
l
201
301
401 - 407

Public Sector Management Act 1982 (WA)
38

Salaries and Allowances Act 1975 (WA)
5
5A
7

Salaries and Allowances Regulations 1975 (WA)
cl 3

State Superannuation Act 2000 (WA)
Part 4

State Superannuation Regulations 1975 (WA)
cl 3

Superannuation Contributions Tax (Assessment and Collection) Act 1997 (Cth)
The Act

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth)
The Act

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth)
The Act

Case References:
Amalgamated Society of Engineers v Adelaide Steamship Co Ltd
(1920) 28 CLR 129
(1920) 26 ALR 337

Attorney-General (NSW) v Perpetual Trustee Company Ltd
(1955) 92 CLR 113
[1955] ALR 469
[1955] AC 457
[1955] 2 WLR 707
[1955] 1 All ER 846

Austin v Commonwealth
[2003] HCA 3
(2003) 215 CLR 185
2003 ATC 4042
(2003) 51 ATR 654
(2003) 195 ALR 321

Bayside City Council v Telstra Corporation Ltd
[2004] HCA 19
(2004) 216 CLR 595
(2004) 206 ALR 1

Clarke v Commissioner of Taxation of the Commonwealth of Australia
[2009] HCA 33
(2009) 240 CLR 272
(2009) 258 ALR 623
(2009) 72 ATR 868

Coomber (Surveyor of Taxes) v Justices of the County of Berks
(1883-84) LR 9 App Cas 61

Fortescue Metals Group Ltd v Commonwealth
[2013] HCA 34
(2013) 250 CLR 548
2013 ATC 20-405
(2013) 89 ATR 1

Melbourne Corporation v Commonwealth
(1947) 74 CLR 31
[1947] ALR 377
[1947] HCA 26

Queensland Electricity Commission v Commonwealth
(1985) 159 CLR 192
[1985] HCA 56

Re Australian Education Union Ex parte Victoria
(1995) 184 CLR 188
(1995) 128 ALR 609

Western Australia v Commonwealth
(1995) 183 CLR 373
(1995) 128 ALR 1
[1995] HCA 47