There Must be Limits: The Commonwealth Spending Power

Abstract

The federal spending power is used in Australia to affect community action and implement government policy. There are two types of concerns that arise over the use of conditional spending to achieve governmental outcomes: the reduction in transparency and therefore accountability caused by bypassing the legislative process; and its potential to undermine the constitutional division of powers between the federal and state governments. The potential unlimited nature of the spending power exacerbates these concerns, and the article illustrates this by chronicling the use of the spending power in Australia focussing particularly upon the recent reliance upon it in the education sector. The article concludes by discussing the potential ways in which the spending power may be limited through an examination of both its historical foundations and the High Court jurisprudence. The conclusion drawn is that there are two limits on the spending power in Australia. The first being a practical limitation based upon Parliament's constitutional role to supervise all Executive spending through the appropriations power. Second, the power is limited in its reach by the Executive's ability to actually spend any money granted to it by Parliament: whilst its seems the Executive has an unlimited power to gift funds, conditional funding arrangements such as are substantially relied upon, must fall within the scope of the executive power in s 61.