GEORGE WILLIAMS June 21, 2012
Canberra has been dragged back to the drawing board over its funding powers.
QUEENSLAND father Ron Williams undertook a David versus Goliath battle when he challenged the National School Chaplaincy Program in the High Court. He did so because he believed that funding for religious chaplains in state schools breached the separation of church and state.
This line of attack failed, but he succeeded in having the funding struck down because it breached a different set of principles. The High Court recognised that the scheme ran counter to the federal character of Australia's system of government and the notion that the spending of money should be subject to parliamentary oversight.
Hundreds of millions of federal dollars have been provided for school chaplains across Australia. Williams argued that this breached the requirement in section 116 of the constitution that ''no religious test shall be required as a qualification for any office or public trust under the Commonwealth''.
Predictably, this argument failed. The judges did not need to look at the issue of whether a religious test was involved because school chaplains do not have a contractual or other arrangement with the federal government and do not hold ''office under the Commonwealth''.
Williams had a back-up argument, and it was a strong one. He relied on the Pape High Court decision, which in 2009 very nearly struck down the Rudd government's $900 cash stimulus payment.
Although Bryan Pape lost, he demolished the long-held assumption the Commonwealth can spend money in whatever area it wishes. Instead, the court held the Commonwealth can spend money only in areas in which it had legislative or executive power.
The chaplaincy program is one of many federal programs that provide funding according to a set of government guidelines rather than legislation. This meant the program relied on the Commonwealth's executive power.
In a major blow to the Commonwealth, the High Court gave this executive power a surprisingly narrow reading. It held that the power did not support spending of this kind, and if the payments were to be made, they must be supported by legislation.
The problem for the government is that it is not clear that this type of scheme can be supported by legislation. Federal Parliament can pass laws only in certain areas, and has no general power over education.
The only certain path by which the Commonwealth can restore the chaplaincy program is to channel the funding through the states using section 96 of the constitution. But the states would have to agree to receive the money for this purpose, and the government will be wary about building them and their bureaucracies into the scheme.
The High Court decision is narrow in the sense that it struck down only school chaplaincy funding. In doing so the court addressed fundamental principles about the scope of federal powers that affect a broader range of Commonwealth arrangements.
Several federal schemes have been on shaky ground since the Pape decision. The Commonwealth had been hoping the Williams case would resolve matters in its favour. Instead, the High Court has imposed even more stringent limits.
This decision will force the federal government back to the drawing board to consider what programs it funds and how. Unless it does this as a matter of priority, others may be emboldened to bring further challenges.
Direct federal funding of local government, including the Roads to Recovery program, continues to be subject to considerable doubt. The Commonwealth may also be on vulnerable ground in the education sector generally. Questions can be raised about direct federal funding of private schools and universities. Support for community groups, the arts and sports may also be in issue.
Williams did not win a victory on the grounds of separation of church and state, but did achieve a major win for the states. The result may be major, long-term changes to federal funding programs. It is likely to mean the Commonwealth will spend more money via the states. This emphasises the federal character of the constitution, but it will come at a cost of enormous complexity and uncertainty.
George Williams is the Anthony Mason Professor of Law at the University of NSW.
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