The IPA has commissioned Bryan Pape to express an opinion on the constitutionality of the carbon tax.
‘The legal opinion concludes that the legislation can be challenged on a number of grounds, including:
1. The Commonwealth cannot tax State property. Legally carbon dioxide emissions are State property.
2. The Commonwealth cannot impose a carbon tax and other related penalties within the same Act.
3. The Commonwealth cannot introduce a carbon tax within its external affairs powers.
‘The IPA commissioned a legal opinion because State governments have sat on their hands and let the Gillard government introduce a tax that they could potentially stop’.
Jennifer Hewett at the AFR has an excellent write-up.
… the Clean Energy Act 2011 contravenes Section 55 of the constitution by combining the imposition of a tax and its administration. Under that section, laws imposing taxation are permitted to deal only with that, and “any other matter shall be of no effect”. Pape’s opinion argues that means that any other matters included in the law, such as the administration of the tax, should be struck down.
If this argument were to be accepted by the court, none of the other grounds for challenge would be necessary. But if it were not, Pape says there are other avenues of attack.
One is that the so-called tax is actually a penalty, which means it cannot be imposed under taxation laws. Another is that the Act exceeds the corporations power of the commonwealth under Section 51(xx) by declaring it to be “a law with respect to trading corporations’’.
Update: Short form opinion here.