Victoria v Commonwealth (1971)
Encyclopedia
Victoria v Commonwealth 122 CLR
353, commonly referred to as the Payroll Tax Case, was a case decided in the High Court of Australia
regarding the scope of the Commonwealth's taxation power and the extent to which it can burden a state's structural integrity.
The Act was challenged on the grounds that it breached the Melbourne Corporation
principles limiting the extent to which the Commonwealth can burden states.
Windeyer J notes that the increased entry of the Commonwealth in areas of concurrent federal and state power was foreseen early on, and the progressive increased fiscal power of the Commonwealth was indicative of this notion. The states in the process of Federation agreed willingly to become a single federal entity giving up some of their powers without gaining any new ones. The gradual centralisation of power in the Commonwealth grew from this process. This view is particularly persuasive in the environment after Engineers
which swept away reserved State powers
and the doctrine of intergovernmental immunities.
Commonwealth Law Reports
The Commonwealth Law Reports are the authorised reports of decisions of the High Court of Australia. The CLR are published by the Lawbook Company, a division of Thomson Reuters...
353, commonly referred to as the Payroll Tax Case, was a case decided in the High Court of Australia
High Court of Australia
The High Court of Australia is the supreme court in the Australian court hierarchy and the final court of appeal in Australia. It has both original and appellate jurisdiction, has the power of judicial review over laws passed by the Parliament of Australia and the parliaments of the States, and...
regarding the scope of the Commonwealth's taxation power and the extent to which it can burden a state's structural integrity.
Background
Commonwealth passed the Payroll Tax Act which imposed a 2.5% tax on all wages paid by an employer. It also applied to all state employers.The Act was challenged on the grounds that it breached the Melbourne Corporation
Melbourne Corporation v Commonwealth
Melbourne Corporation v Commonwealth 74 CLR 31; [1947] HCA 26 , also known as the Melbourne Corporation case or the State banking case, is an important case in Australian constitutional law...
principles limiting the extent to which the Commonwealth can burden states.
Decision
The court held that the Act was a valid one under the 'Melbourne Corporation' two-limbed principle. The majority spoke about the implications that could be drawn from the constitution. This came from the fact that the constitution contemplates the existence of the states. A law that fundamentally restricts their exercise of essential functions would go against the implication of the continued existence of the states.Windeyer J notes that the increased entry of the Commonwealth in areas of concurrent federal and state power was foreseen early on, and the progressive increased fiscal power of the Commonwealth was indicative of this notion. The states in the process of Federation agreed willingly to become a single federal entity giving up some of their powers without gaining any new ones. The gradual centralisation of power in the Commonwealth grew from this process. This view is particularly persuasive in the environment after Engineers
Amalgamated Society of Engineers v Adelaide Steamship Co. Ltd.
Amalgamated Society of Engineers v Adelaide Steamship Co Ltd 28 CLR 129 was a landmark Australian court case decided in the High Court of Australia on 31 August 1920...
which swept away reserved State powers
Reserved State powers
The reserved country powers, also called reserved powers, is a doctrine reserved exclusively for the states, that is used in the interpretation of the Constitution of Australia. It adopted a restrictive approach to the interpretation of the specific powers of the Federal Parliament in order to...
and the doctrine of intergovernmental immunities.