Executive power and spending

The idea

Executive power and spending turns on one distinction. An appropriation is not a power to spend. Sections 81 and 83 of the Constitution are a precondition. They set what Parliament must do before money is drawn, so that Parliament supervises the executive. They are not a source of power to spend the money once it is drawn.

The Commonwealth executive is not an ordinary legal person. It cannot contract and spend simply because a legal person could. It cannot act on a subject merely because that subject falls within a head of legislative power.

Authority to spend is found in one of two places. Either a statute authorises the spending and is itself supported by a head of power, or the spending falls within the recognised non statutory executive power in s 61.

Where it comes from

The modern law begins with Pape v Federal Commissioner of Taxation. The Commonwealth paid a tax bonus to answer the global financial crisis, and the payments required authority beyond the appropriating words. The Court held that appropriation is a precondition and never a spending power. The payments survived on a different footing. The incidental power in s 51(xxxix) operated on the nationhood aspect of the executive power in s 61.

Williams v Commonwealth (No 1) supplied the limiting principle. A Commonwealth scheme funded school chaplains and rested on an appropriation and nothing more. The Court held that the executive may not contract and spend without statutory authority, even where a private legal person could have done the same. Federalism and the Senate's control of expenditure require it. This is because an appropriation is a weak control that the Senate cannot amend under s 53.

Williams v Commonwealth (No 2) closed the retry. Parliament passed a later Act listing the chaplaincy program, and the scheme failed again. Authority still required a head of power, and consultation or State agreement that a scheme serves the national interest supplied none.

How it is examined

Executive power and spending is a final exam pillar. It appears in four of the seven papers from 2019 to 2025, usually for 15 to 25 marks. The papers give a spending program and ask whether the Commonwealth has authority for it.

The marks reward a method worked in order rather than a rush to the answer. Two things separate strong scripts. The first is reading the question's exclusions before starting. This is because the 2019 paper expressly barred s 51(xxxix), and the whole answer turned on obeying that. The second is spending most of the words on the live step. The live step is usually statutory authority or nationhood, and nationhood is argued both ways before the conclusion.

How to argue it

Work the steps in order and stop on the one the facts make live.

1. Read the exclusions. Note any head of power the question bars before going further and route around it.
2. Appropriation. Confirm a valid appropriation under ss 81 and 83, then say plainly that it is necessary and not sufficient (Pape; Williams No 1).
3. Statute. Ask whether a statute authorises the spending and is supported by a head of power. Where no ordinary head fits, the pattern in Pape is s 51(xxxix) operating on the nationhood aspect of s 61.
4. Non statutory power. If there is no statute, ask whether the spending falls within one of the four recognised categories, ordinary administration of departments, execution of Commonwealth laws, the prerogatives, or nationhood (Williams No 1). Any one of them suffices.
5. Nationhood check. If nationhood is run, weigh the scale of the crisis, whether only the Commonwealth can respond, and whether the States or an s 96 grant could achieve the same (Pape).

On the contested step the Commonwealth will argue that the program answers a national crisis and that only it has the resources to respond, so the nationhood power is engaged (Pape). The challenger will argue that the crisis is not on the scale of the global financial crisis, that the States or an s 96 grant could achieve the same, and that the executive cannot label a subject a national concern and thereby gain power over it (Pape). A wide impairment of individual freedom counts against the Commonwealth (Davis).

Where the spending rests on a statute, the last move before the conclusion is whether the statute can be read down to a valid operation. In Williams No 2 s 32B was read down to reach only programs within a head of power. The chaplaincy scheme fell within none, so s 32B could not support the chaplaincy grants.

Conclude in the taught form. A Court would likely hold the spending valid or invalid, naming the pivotal factor, whether a supporting head of power exists, and the appropriation that is present but not enough.

Practice problems

One hundred exam-style problems across twelve topics. Pick a topic, read the problem, write your own answer in IRAC, then reveal the Pass and H1 exemplars and the examiner's comments. Step through in order or jump to a random one. Nothing you type is saved or sent anywhere.

The trap

The most costly error is treating a budget line item as authority to spend. The facts often plant a single appropriation heading and invite the conclusion that it authorises the program. It does not. An appropriation is necessary and never sufficient (Pape; Williams No 1). The answer must note the appropriation and then move to the question of statutory or non statutory authority.

A passed appropriation is not Senate authorisation either. This is because the Senate cannot amend an appropriation, and its control there is weak (Williams No 1).

Key authorities

• Pape v Federal Commissioner of Taxation — appropriation is necessary but never a spending power, and the tax bonus stood under s 51(xxxix) on the nationhood aspect of s 61.★
• Williams v Commonwealth (No 1) — the executive cannot contract and spend without statutory authority merely because a legal person could.★
• Williams v Commonwealth (No 2) — a later Act still failed, and s 32B was read down to reach only programs within a head of power.★
• Bardolph — ordinary administration of departments needs no statute, but capital works and new programs do.
• AAP Case (Mason J) — nationhood reaches enterprises peculiarly adapted to the government of a nation which cannot otherwise be carried on.
• Davis — advancing the nation is a facultative function and is not the occasion for a wide impairment of individual freedom.
• Tampa Case — border control falls within the prerogatives properly attributable to the Commonwealth.
• Barton — extradition falls within the recognised prerogatives of the Crown.
• Re Woolley (McHugh J) — there is no general federal power over detention, a caution on how far nationhood reaches.