Williams V. Commonwealth: Commonwealth Executive Power and Australian Federalism

Article excerpt

A majority of the High Court in Williams v Commonwealth held that the Commonwealth executive does not have a general power to enter into contracts and spend public money absent statutory authority or some other recognised source of power. This article surveys the Court's reasoning in reaching this surprising conclusion. It also considers the wider implications of the case for federalism in Australia. In particular, it examines: (1) the potential use of s 96 grants to deliver programs that have in the past been directly funded by Commonwealth executive contracts; and (2) the question of whether statutory authority may be required for the Commonwealth executive to participate in intergovernmental agreements.

CONTENTS

 I  Introduction
 II Background
III Preliminary Issues A Standing
     B Section 116
     C Validity of Appropriation
 IV Section 61 of the Constitution
     A Broad Submission
     B Narrower Submission
       1 Precedent
       2 Drafting History, Opinions and Commentaries
     C The Corporations Power and the Benefits Power
 V Implications
     A Section 96
     B Intergovernmental Agreements
       1 Nationhood Power
       2 Analogy to Executive Contracts
 VI Conclusion

I INTRODUCTION

Since Federation, the scope of the Commonwealth executive power in s 61 of the Constitution has been an unsolved mystery. Many assumed that, at the very least, the power extended to the subject matters of enumerated heads of Commonwealth legislative power within the Constitution. It had also been assumed that the executive did not require any specific statutory authority to engage in activities relating to those subject matters. Over time, these assumptions have formed the basis for Commonwealth direct spending programs implemented through executive contracts between the Commonwealth and private parties. These executive contracts now account for somewhere between 5 and 10 per cent of all Commonwealth expenditure (1) and, until recently, had been used to implement a broad range of Commonwealth policy objectives without the support of legislative authority.

In Williams v Commonwealth ('Williams'), (2) the High Court exploded these assumptions regarding the scope of federal executive power. The case turned on the validity of an agreement entered into between the Commonwealth and a private company that provided 'chaplaincy services' in a Queensland state school. By a 6:1 majority, with Heydon J dissenting, the Court held that executive power is not coextensive with legislative power and concluded that, in most circumstances, the Commonwealth executive requires statutory authority before it can enter into contracts with private parties and spend public money. (3)

The majority dismissed the Commonwealth's submission that the capacity of its executive to contract was effectively unlimited. French CJ, Gummow and Bell JJ, and Crennan J also rejected a narrower submission by the Commonwealth. That submission contended that the executive was empowered to enter into contracts on matters that could be the subject of legislation, even if no such legislation had been enacted. In rejecting this, they drew heavily on principles of federalism and a concern that the grant-making power in s 96 of the Constitution could be 'bypassed' by the Commonwealth if it could contract without legislative authority. (4)

Hayne J and Kiefel J did not find it necessary to determine the correctness of this narrower submission since, in their view, the Constitution did not empower the legislature to enact a statute in support of the chaplaincy program. (5) They did, however, emphasise concerns over the potential widening of Commonwealth legislative powers by way of an unlimited executive power operating in combination with the incidental legislative power contained in s 51(xxxix) of the Constitution. (6)

This case note examines the reasoning put forward by the High Court in Williams, highlighting in particular the strong federal themes central to many of the judgments. …