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Structural Problems for a Guaranteed Minimum Income and a Job Guarantee Scheme

Published online by Cambridge University Press:  24 January 2025

Christopher Arup
Christopher Arup*
Affiliation:
La Trobe University
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Abstract

Economic and technological developments suggest that the Commonwealth will again be pressed to consider the enactment of a scheme to guarantee universally either a minimum income or a job opportunity. In this article, Mr Arup examines the debate over the efficacy of the two guarantees, concentrating upon their structural problems and operational difficulties as these result from doubts about constitutional power. He concludes that support for either guarantee lies in a combination of heads of constitutional power.

Type
Research Article
Information
Federal Law Review , Volume 11 , Issue 1 , March 1980 , pp. 19 - 39
Copyright
Copyright © 1980 The Australian National University

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References

1 A summary of major proposals overseas to 1974 is contained in the Common-wealth of Australia, Treasury Taxation Paper No. 8 Negative Income Tax and Tax Credit Systems (1974). In Australia, a GMI has been recommended by, inter alia, the Commission of Inquiry into Poverty and the Priorities Review Staff: Commonwealth of Australia, Commission of Inquiry into Poverty, First Main Report (1975) and Commonwealth of Australia, Priorities Review Staff, Possibilities for Social Welfare in Australia (1975), respectively. However, more recently, relevant government inquiries have chosen not to recommend for or against a GMI. See Commonwealth of Australia, Taxation Review Committee, Full Report (1975); Commonwealth of Australia, The National Superannuation Committee of Inquiry, Final Report-A National Superannuation Scheme for Australia Part One (1976) 19; Commonwealth of Australia, Inquiry into Unemployment Benefit Policy and Administration, Report (1977) 10. Leading private social welfare organisations have recommended the introduction of a GMI; in particular, see Australian Council of Social Service, Task Group on Guaranteed Minimum Income, Guaranteed Minimum Income: Towards the Development of a Policy (1975).

2 55 Congressional Digest 167 (June-July 1976) for a summary of the (Humphrey-Hawkins) Full Employment and Balanced Growth Bill. Further, refer Gartner et al. (eds), A Full Employment Program for the 1970s (1976); Bullock (ed.), A Full Employment Policy for America (1973); Griffiths, “The Right to Work and Full Employment” (1979) 1 Social Alternatives 69; Griffiths, Unemploy-ment: Muddled or Managed (1978) ch. 12.

3 The proposal is not new: e.g. Russell, Roads to Freedom (1918). For critical discussion of the GMI: Tobin et al., “Is a Negative Income Tax Practical?” (1967) 77 Yale Law Journal 1; Prest, “The Negative Income Tax: Concepts and Problems” (1970) British Tax Review 352; Henderson, ''The Relief of Poverty: Negative Income Taxes and Other Measures” (1971) 47 Economic Record 106; Saunders, “A Guaranteed Minimum Income Scheme for Australia? Some Problems” (1976) 11 Australian Journal of Social Issues 174.

4 Commonwealth of Australia, Commission of Inquiry into Poverty, First Main Report (1975).

5 Current employment related schemes are briefly summarised in Common-wealth of Australia, Department of Industry and Commerce, Handbook of Services and Assistance to Industries Provided by Commonwealth and State Governments and Agencies (1979). Earlier schemes are reviewed in Common-wealth of Australia, Priorities Review Staff, Assistance for Structural Adjustment, Income Maintenance, Etc. (1975).

6 94th Congress, 2d Session, H.R. 50, S. 50. The text of the Bill is to be found in Bullock (ed.), A Full Employment Policy for America (1973) Appendix V.

7 Professor Daintith discusses the problems in the English context, in “The Functions of Law in the Field of Short-term Economic Policy” (1976) 92 L.Q.R. 62.

8 Commonwealth of Australia, Social Welfare Commission, Report on the Australian Assistance Plan (1976).

9 E.g. Federal Council of the British Medical Association v. The Common-wealth (1949) 79 C.L.R. 201, 243 per Latham C.J.

10 E.g. Murphyores Incorporated Pty Ltd v. The Commonwealth (1976) 136 C.L.R. 1, 22. Cf. R. v. Barger (1908) 6 C.L.R. 41.

11 For general discussion of the scope of these powers, Phillips, “Federalism and the Provision of Social Services" in Hancock (ed.), The National Income and Social Welfare (1965) ; Sackville, "The Constitutional Framework of Social Welfare" (1973) 5 F.L. Rev. 248; Crommelin and Evans, "Explorations and Adventures with Commonwealth Powers" in Evans (ed.), Labor and the Constitution 1972-1975 (1977) 37-45.

12 (1949) 79 C.L.R. 201.

13 (1945) 71 C.L.R. 237.

14 (1975) 134 C.L.R. 338.

15 (1949) 79 C.L.R. 201, 259 per Dixon J., 292 per Webb J.

16 Id. 245 per Latham C.J., 282 per McTiernan J., 260 per Dixon J., 286-287 per Williams J.

17 Id. 246 per Latham C.J.

18 (1975) 134 C.L.R. 338.

19 Social Services Act 1947 (Cth), ss. 119(1), 114(1) and 120(d).

20 The Oxford English Dictionary (1970) Vol. 11, U-174.

21 (1975) 134 C.L.R. 338, 414-415.

22 Discussed in Lane, Commentaries on the Australian Constitution (1972) 239-241.

23 (1975) 134 C.L.R. 338, 362-364 per Barwick C.J., 377-379 per Gibbs J., 400-401 per Mason J.

24 (1949) 79 C.L.R. 201, 242-243 per Latham C.J., 260 per Dixon J., 279 per McTiernan J., 292 per Webb J.

25 Id. 261.

26 This also raises the question of the relevance of section 51(xiv) of the Constitution, the insurance power, to federal social security schemes. The scope of the insurance power is not treated here because fundamental doubts about its relevance to a scheme of social or public insurance exist. In particular doubt lies as. to whether the Commonwealth could, through this power, compel persons to insure themselves or others, in the light of the comments of Fullagar J. in Insurance Commissioner v. Associated Dominions Assurance Society Pty Ltd (1953) 89 C.L.R. 78, 87. Further see Cantor, “National Insurance in its Constitutional Aspects” (1928) 2 A.L.J. 219. More critically, doubt must lie as to whether a comprehensive social insurance scheme really is “insurance” at all, especially if contributors and contribution levels do not correspond to payees and payment levels and (b) the event “insured” against is more of a certainty than a risk or contingency. See e.g. Australian Steamships Ltd v. Malcolm (1914) 19 C.L.R. 298; Hospital Provident Fund Pty Ltd v. The State of Victoria (1952-1953) 87 C.L.R. 1 and further Kennan, ''The Possible Constitutional Powers of the Commonwealth as to National Health Insurance” (1975) 49 A.L.J. 261. The question was again raised by the National Superannuation Committee of Inquiry, op. cit. 38-39.

27 (1949) 79 C.L.R. 201, 261; see also 246 per Latham CJ.

28 See e.g. O'Neill v. City of Williamstown [1932] V.L.R. 412; Metropolitan Water, Sewerage and Drainage Board v. MacPherson [1933] A.R. (N.S.W.) 64.

29 Commonwealth of Australia, Treasury Taxation Paper No. 8 op. cit. 8-15.

30 “Current Topics” (1974) 48 A.L.J. 511 and 560.

31 Parton v. Milk Board (Vic.) (1949) 80 C.L.R. 229, 259 per Dixon J.

32 (4th ed. 1970) 169.

33 Income Tax Assessment Act 1936 (Cth), ss. 51, 81 AA-82 K.

34 Id. ss. 80, 149-158 AC.

35 Fairfax v. Federal Commissioner of Taxation (1965) 114 C.L.R .1.

36 Id. 7 and 13 per Kitto J., 19 per Windeyer J.

37 Howard, Australian Federal Constitutional Law (1968) 324.

38 Kewley, Social Security in Australia 1900-1972 (2nd ed. 1973) ch. 12.

39 The Vacuum Oil Co. Pty Ltd v. The State of Queensland (1934) 51 C.L.R. 108, 142 per McTiernan J.; R. v. Barger (1908) 6 C.L.R. 41, 82 per Isaacs J.

40 Campbell, “Parliamentary Appropriations” (1971) 4 Adelaide Law Review 145; Sawer, Federation Under Strain (1977) 87.

41 Supra pp. 30-31.

42 Evans, “Constitutional Issues” (of the challenge to the A.L.A.O.) (1975) 1 Legal Service Bulletin 166. See further Saunders, “The Development of the Com-monwealth Spending Power” (1978) 11 Melbourne University Law Review 369.

43 (1945) 71 C.L.R. 237, 256 per Latham C.J., 273 per McTiernan J.

44 (1975) 134 C.L.R. 338, 367 per McTiernan J., 421 per Murphy J.

45 Campbell, op. cit. 161-162.

46 (1945) 71 C.L.R. 237, 275; also 256-257 per Latham C.J. Cf. AAP case (1975) 134 C.L.R. 338, 369-370 per McTiernan J.,424 per Murphy J., 396 per Mason J.

47 (1945) 71 C.L.R. 237, 266 per Starke J., 269 per Dixon J., 282 per Williams J.,(Rich J. agreeing).

48 (1975) 134 C.L.R. 338, 361-364 per Barwick C.J., 371-379 per Gibbs J., 412-413 per Jacobs J.

49 Id. 396 per Mason J.

50 (1975) 134 C.L.R. 338.

51 Although the AAP went beyond this: id. 397-398 per Mason J., 412-413 per Jacobs J.

52 Gerard, “A Reply to the AAP Case” (1977) 2 University of New South Wales Law Journal 105, 110.

53 Richardson, “The Executive Power of the Commonwealth” in Zines (ed.)Commentaries on the Australian Constitution (1977).

54 Piven and Cloward, Regulating the Poor: The Functions of Public Welfare (1971).

55 Gurry, “The Implementation of Policy Through Executive Action” (1977) 11 Melbourne University Law Review 189.