PStephsonBY PETA STEPHENSON

Last night, the House of Representatives passed ‘emergency’ retrospective legislation to authorise Commonwealth expenditure relating to the provision of offshore detention services on Nauru and Manus Island. The Bill is currently before the Senate. The legislation also purports to authorise the Commonwealth to take any ‘action’ in relation to the regional processing scheme, including ‘exercising restraint over the liberty of a person’.

The legislation was rushed through Parliament after the directions hearing in the Human Rights Law Centre (HRLC) High Court challenge to the Commonwealth Government’s offshore detention arrangements.

This post will briefly explain the nature of the challenge, and the significance of the High Court’s recent Williams decision to it, before turning to consider whether the so-called ‘nationhood power’ could have supported the arrangements in the absence of the ‘emergency’ validating legislation.

The High Court Challenge

One aspect of the HRLC’s challenge concerns the constitutional validity of an agreement entered into by the Commonwealth Government with Transfield Services Pty Ltd for the provision of services inside the Nauru and Manus Island detention centres. Pursuant to the agreement, Transfield has been paid a reported $1.2 billion in public funds.

It is alleged that the agreement has been entered into without the Commonwealth enacting any legislation to support it. The only authorisation that exists is in regulations made under section 32B of the Financial Framework (Supplementary Powers) Act 1997 (Cth), which purports to authorise the following programs:

  1. Program 417.018 ‘Offshore Asylum Seeker Management – Community and Detention Services,’ the objective of which is to provide support, health and detention services to people in immigration detention, in both community and detention environments, and to offshore entry persons seeking asylum; and

  1. Program 417.027 ‘Offshore Asylum Seeker Management’ which seeks to provide for capital works to ensure appropriate accommodation for asylum seekers and for upgrades and enhancements to essential amenities and security at existing facilities.

Section 32B’s authorisation of spending for national school chaplains of the Financial Framework (Supplementary Powers) Act 1997 (Cth) was successfully challenged in the second Williams decision. In that case, the Court left open the possibility that the broad authorisation through delegation achieved by section 32B was itself unconstitutional.

If it is correct that the authorisation under section 32B is insufficient – either because it is too vague, or because section 32B is invalid in its entirety – the current High Court challenge raises the question of whether it falls within the scope of the Commonwealth’s executive power in section 61 of the Constitution, and in particular, the scope of the Commonwealth’s power to contract and spend in the absence of legislative authority. This aspect of executive power has been a cause of ongoing consternation for the Commonwealth since Mr Ron Williams’ first challenge to federal funding of national school chaplains in the 2012 case of Williams v Commonwealth.

The other part of the HRLC’s challenge, which concerns whether the Commonwealth Government has the power to detain asylum seekers on Nauru and Manus Island, also raises questions about the scope of the non-statutory powers of the Commonwealth Executive in relation to offshore detention more generally. This aspect of the challenge will not be covered in this post.

The Commonwealth’s power to spend after Williams

Prior to Williams, it was assumed that the Commonwealth’s executive power to contract and spend extended to those areas that fell within the Commonwealth’s legislative powers in section 51 and section 52 of the Constitution.

It had been assumed that the Parliament did not have to enact legislation authorising those contracts and expenditure beyond the authorisation that was provided in a parliamentary appropriation. In short, the fact that the spending could be supported by a hypothetical law within a head of legislative power was sufficient.

In Williams, a majority of the High Court overturned this assumption. Williams concerned a challenge to Commonwealth funding pursuant to the National School Chaplaincy Program (NSCP), which was not established or regulated by legislation. The Court concluded that legislation was generally needed to support the Commonwealth’s entry into contracts and associated expenditure of public funds.

However, the Court in Williams also identified five categories of Commonwealth expenditure which may be exempt from the requirement of prior legislative authorisation. Relevantly, for present purposes, the Court suggested that Commonwealth could contract and spend, without enacting legislation, if it could be supported by the common law prerogatives or the so-called ‘nationhood power.’

Spending on offshore detention

The Commonwealth has power under section 51(xix) and section 51(xxvii) of the Constitution to make laws with respect to naturalisation and aliens and immigration and emigration respectively. If the pre-Williams assumption was still in place, these heads of power might have supported an agreement and expenditure for offshore detention services. The Commonwealth may also have been able to support such legislation under the external affairs power in section 51(xxix) of the Constitution.

Post-Williams however, serious questions arise as to whether Commonwealth spending,  absent statutory authority, is constitutional. To assert that the spending could be authorised by a head of federal legislative power is no longer sufficient. Without legislative authority, it must fall within one of the exceptions, including, potentially, the nationhood power.

So, what exactly is the nationhood power? Could Commonwealth spending on the provision of services inside the Nauru and Manus Island detention centres fall within its scope?

The nationhood power

The nationhood power is the shorthand name given to a ‘dimension’ of Commonwealth executive power. It has its roots in Justice Mason’s judgment in the Australian Assistance Plan Case (AAP Case). According to Justice Mason, this power confers on the Commonwealth ‘a capacity to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation.’

In Davis v Commonwealth, the nationhood power was found to support Commonwealth activities associated with the organisation and commemoration of Australia’s bicentenary, including the incorporation of a company for that purpose. In that case, a majority of the Court concluded that those activities were within the ‘peculiar province’ of the Commonwealth as the national government, as the States had only a limited interest in them.

In Pape v Commissioner of Taxation, one of the Commonwealth Government’s responses to the global financial crisis – payments of one-off tax bonuses to individual taxpayers to stimulate the economy, was also held by the High Court in to be an activity ‘peculiarly adapted’ to the national government. Only the Commonwealth had the capacity and resources to respond effectively to the emergency which threatened the nation as a whole.  

It has also been suggested that inquiries, investigations, scientific research and national cultural initiatives are examples of activities ‘peculiarly adapted’ to a national government.

Limiting the nationhood power

Although the nationhood power appears to support a potentially wide range of Commonwealth activities, the High Court has suggested that it cannot support programs being administered in areas beyond the Commonwealth’s area of responsibility, simply on the basis of convenience or because the subject matter has a national character.

These limits can, once again, be traced back to the seminal judgment of Justice Mason in the AAP Case. Justice Mason held that activities associated with the Australian Assistance Plan, including the establishment of Regional Councils for Social Development, and the making of direct grants to them by the Commonwealth, were not ‘peculiarly adapted’ to the national government. The nationhood power could not support the Commonwealth Government using the Regional Councils as a means of engaging in social welfare activities that fell outside the Commonwealth’s area of responsibility and could have been effectively administered and implemented by the States.

Similarly, while it was not raised directly as an issue in Williams, a majority of the Court held that the NSCP was not ‘peculiarly adapted’ to the national government. The States had the resources and capacity to provide chaplaincy programs in state schools and had, in fact, already been funding these programs.

These cases suggest that one relevant factor taken into account by the High Court in determining whether the activities are ‘peculiarly adapted’ to a national government, is whether the States could have effectively administered or implemented the activities in question.

Offshore detention and the nationhood power

The HRLC’s challenge is unlikely to raise these federal considerations. As Justice French observed in Ruddock v Vadarlis (the Tampa Case), while the Commonwealth’s power to make laws with respect to aliens in section 51(xix) and immigration in section 51(xxvii) are concurrent with those of the States, they are powers which are ‘central to the expression of Australia’s status and sovereignty as a nation’ and therefore fall within the Commonwealth’s area of responsibility. In the Tampa Case, Justice French held that the Commonwealth Government had power to detain non-citizens in Australian territorial waters without legislative authority.

However, observations made in CPCF v Minister for Immigration and Border Protection, raise some doubt about whether the nationhood power would support offshore detention arrangements made in the absence of statutory authority. The plaintiff in CPCF had been detained offshore on an Australian vessel for 27 days. The majority, consisting of Chief Justice French and Justices Crennan, Gageler and Keane held that the detention was authorised by the Maritime Powers Act 2013. Justice Keane also considered that the Commonwealth had non-statutory executive power to detain non-citizens offshore.

Justices Hayne and Bell and Justice Kiefel dissented. Their Honours held that the Maritime Powers Act 2013 did not authorise the offshore detention in question and it could not be supported solely by the non-statutory executive power of the Commonwealth. Justice Kiefel’s judgment is of particular interest in this regard. Her Honour was of the view that the ‘“nationhood power” to respond to national emergencies’ was ‘irrelevant’ in that case.

Conclusion

The HRLC’s challenge reiterates the importance of parliamentary scrutiny of Commonwealth spending in a system of responsible and representative government. It raises important questions about the exceptions to the general rule that the Commonwealth requires prior legislative authorisation to enter into contracts and spend public money and directs attention to the scope of the nationhood power and its interaction with the Commonwealth’s spending power.

The urgent passage of legislation to remedy the deficiencies in the Commonwealth’s authorisation to fund and act in relation to the offshore processing centres on Nauru and Manus Island suggests that the challenge raises serious constitutional questions, with high political stakes.

Peta Stephenson is a PhD Candidate and Sessional Tutor at the TC Beirne School of Law, University of Queensland and a Visiting Student at the Gilbert + Tobin Centre of Public Law, UNSW. Peta would like to thank Gabrielle Appleby for her comments and advice in writing this post.

Suggested citation: Peta Stephenson, ‘Commonwealth spending: From school chaplains to offshore detention’ on AUSPUBLAW (25 June 2015) <https://auspublaw.org/2015/06/commonwealth-spending-from-school-chaplains-to-offshore-detention/>.