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81. Consolidated Revenue Fund
All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution.
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From a functional perspective, the idea that there should be one consolidated fund for the Commonwealth of Australia, makes perfect sense. Since the faith and good credit of the Commonwealth is drawn upon the Crown as corporation sole, then a single consolidated fund for that corporation, strengthens the principle of fidus which underlines the currency.
At the formation of the Commonwealth of Australia, the six colonies were not issuing currency in their own right but rather, Pounds Sterling which were ultimately back by the Bank of England and the Crown as corporation sole in London. Although not explicitly stated in the Constitution, the Commonwealth of Australia as the agent for the new corporation sole, would not actually be issuing Pounds Sterling but Australian Pounds. Initially and functionally they would have been tariffed at 1 AuP to 1 GBP and in fact no actual coinage for Australia would be struck until 1910; which meant that Britannia would still rule people's pockets as well as the waves, for a while longer.
One of the features about money is that it is perfectly fungible. That is, one shilling is exactly replaceable with any other shilling. It is kind of interesting when you need to explain this to people who are convinced that you need different pots of monies to achieve different purposes. In actual fact, as money is fungible, then this is unnecessary as all monies achieve the same purpose and function which is the exchange of goods and services.
Section 81 is the underlying constitutional plank, upon which the Commonwealth Bank sat and now the Reserve Bank of Australia sits upon. Monies collected by the Australian Taxation Office, monies which are issued by the Department of Treasury, and the physical currency which fly around the economy at a massive rates of knots, are all drawn on and destroyed upon the basis of Section 81.
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82. Expenditure charged thereon
The costs, charges, and expenses incident to the collection, management, and receipt of the Consolidated Revenue Fund shall form the first charge thereon; and the revenue of the Commonwealth shall in the first instance be applied to the payment of the expenditure of the Commonwealth.
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This is going to sound almost ridiculous but one of the theories as to the reason why money has any value at all, is to do with the fact that governments provide goods and services and issue tokens which are then accepted as payment, which creates a liability in the central bank of the nation; then that liability is retired and destroyed when taxation is paid back to the government. Money which is a universal token system for the exchange of goods and services, could in theory be literally anything but the authority and hence the value of that token system, lies in the state's monopoly of violence to be able to lay claim to collect and destroy those tokens.
Section 82 is the constitutional basis for the invention of the Australian Taxation Office, the second plank upon which the invention of the Reserve Bank of Australia sits upon, and the basis for every single tax including Income Tax, Royalties, the Goods and Services Tax et cetera. The really strange thing is that Australia when looking for guidance for the formulation of its constitution, came up with a better solution than the United States which still hadn't resolved the constitutional question of Income Tax.
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83. Money to be appropriated by law
No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law.
But until the expiration of one month after the first meeting of the Parliament the Governor-General in Council may draw from the Treasury and expend such moneys as may be necessary for the maintenance of any department transferred to the Commonwealth and for the holding of the first elections for the Parliament.
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The Commonwealth of Australia is not someone's personal bank account. It is not there for someone to write cheques for personal advantage. Of course if you are going to appropriate public monies then there should be laws passed through the parliament which authorise that appropriation.
Section 83 also provided the ability before that first parliament ever sat, for the Commonwealth to fund the election of that first parliament. I find it very pleasing that despite some of the knavery and horribleness perpetrated by the various Crowns of Australia, that the Commonwealth of Australia was started with a vote and not a war. It is excellent that we have a day of independence and responsible government which nobody cares about because it is so unremarkable as to go almost unnoticed. I like boring government.
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84. Transfer of officers
When any department of the public service of a State becomes transferred to the Commonwealth, all officers of the department shall become subject to the control of the Executive Government of the Commonwealth.
Any such officer who is not retained in the service of the Commonwealth shall, unless he is appointed to some other office of equal emolument in the public service of the State, be entitled to receive from the State any pension, gratuity, or other compensation, payable under the law of the State on the abolition of his office.
Any such officer who is retained in the service of the Commonwealth shall preserve all his existing and accruing rights, and shall be entitled to retire from office at the time, and on the pension or retiring allowance, which would be permitted by the law of the State if his service with the Commonwealth were a continuation of his service with the State. Such pension or retiring allowance shall be paid to him by the Commonwealth; but the State shall pay to the Commonwealth a part thereof, to be calculated on the proportion which his term of service with the State bears to his whole term of service, and for the purpose of the calculation his salary shall be taken to be that paid to him by the State at the time of the transfer.
Any officer who is, at the establishment of the Commonwealth, in the public service of a State, and who is, by consent of the Governor of the State with the advice of the Executive Council thereof, transferred to the public service of the Commonwealth, shall have the same rights as if he had been an officer of a department transferred to the Commonwealth and were retained in the service of the Commonwealth.
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This is all pretty straight forward. Everyone who was working for a State government department which then gets transferred to the Commonwealth government, is still entitled to their pay and entitlements except that the Commonwealth will have to foot the bill and not the states. This kind of thing must have happened a lot during the initial phase of the Commonwealth and may again have happened as things like Defence, Customs, Agriculture and Rivers, Income Tax et cetera were handed over to the Commonwealth.
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85. Transfer of property of State
When any department of the public service of a State is transferred to the Commonwealth:
- all property of the State of any kind, used exclusively in connexion with the department, shall become vested in the Commonwealth; but, in the case of the departments controlling customs and excise and bounties, for such time only as the Governor-General in Council may declare to be necessary;
- the Commonwealth may acquire any property of the State, of any kind used, but not exclusively used in connexion with the department; the value thereof shall, if no agreement can be made, be ascertained in, as nearly as may be, the manner in which the value of land, or of an interest in land, taken by the State for public purposes is ascertained under the law of the State in force at the establishment of the Commonwealth;
- the Commonwealth shall compensate the State for the value of any property passing to the Commonwealth under this section; if no agreement can be made as to the mode of compensation, it shall be determined under laws to be made by the Parliament;
- the Commonwealth shall, at the date of the transfer, assume the current obligations of the State in respect of the department transferred.
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Section 84 is the complementary property statement which accompanies Section 84. The only things which have ever existed since the creation of the world are the things in, on and under the ground and sea, and the people who live there. Since Section 84 has already dealt with the staff that are to be transferred at the inception of the Commonwealth and their respective entitlements, then Section 85 deals with the accompanying stuff.
Section 85 is also the basis upon which firstly the Australian Capital Territory was transferred to the Commonwealth in 1913 and then Jervis Bay Territory in 1915; which contrary to popular belief, was never part of the ACT.
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86. [Customs, excise, and bounties]
On the establishment of the Commonwealth, the collection and control of duties of customs and of excise, and the control of the payment of bounties, shall pass to the Executive Government of the Commonwealth.
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It makes sense that if the Commonwealth Government is charged with the obligation to manage quarantine and border controls, that it should also be given the privilege to charge customs duties on goods which enter the Commonwealth. Granted that some of this has to do with the protection of industries within the bounds of the Commonwealth but it also has to do with the safety and security of the people of the Commonwealth with respect to dangerous goods which may be used as weapons, agricultural and natural goods which have the potential to bring disease, and vice goods such as opiates, tobacco, alcohol et cetera which have to do with the safety and security of people's own bodies.
Customs and excise duties on vice goods are generally imposed either as a deterrent to curb consumption through price controls, or as recovery through the instrument of taxation to help pay for the carrying costs which the consumption of those vice goods are going to impose upon the community and nation as a whole. There is also the rather strange fact that at levels on taxation above 4% of the value of vice goods, that the recovered revenues end up being slightly more than the costs incurred over someone's lifetime. A smoker for instance, generall has a shorter life and as such incurs less in the way of whole of life medical expenses, save for a sharp spike towards the end. The same can generallly be said about the amount of taxation recovered from alcoholics and dipsomaniacs.
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87. [Revenue from customs and excise duties]
During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, of the net revenue of the Commonwealth from duties of customs and of excise not more than one-fourth shall be applied annually by the Commonwealth towards its expenditure.
The balance shall, in accordance with this Constitution, be paid to the several States, or applied towards the payment of interest on debts of the several States taken over by the Commonwealth.
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In the really early days of the Commonwealth of Australia, there was no Income Tax. The prime method of funding the Commonwealth Government was either through the imposition of customs and excise duties or transfer payments from the states. Section 87 suggests that the total revenue of the Commonwealth from customs and excise duties should be more than 25% of its total revenue; with the excess being refunded to the states.
In 2022 when the size and scope of the Commonwealth has increased dramatically, the biggest source of funds flowing into the top of the bucket is Income Tax, with Company Tax and the Goods and Services Tax making up the next largest sources of revenue. I very much doubt that the percentage of revenues from customs and excise duties has ever reached as much as 25%; which means to say that Section 87 has been more or less functionally useless.
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88. Uniform duties of customs
Uniform duties of customs shall be imposed within two years after the establishment of the Commonwealth.
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The six states pretty much hated each other's existence and came together after the great powers of France and Germany started acquiring properties in the far east and the Pacific. Australia, which is more easterly than the far east, New Zealand which is more easterly still, and Fiji which is even more easterly, all came together to argue over Federation for the big purpose of defence and security. However the six states which were all singularly responsible for their own taxation, which included custom duties, excise, and what would in future be income tax, all had different rates of taxation all over the place.
A uniform rate of duties of customs does two things. Firstly it reduces competition between the states, who would have otherwise competed on taxation, excise, and duty rates, in order to attract business. Secondly, it reduces the ability for private entities to make profits via arbitrage; thus reducing dishonesty and knavery to some degree.
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