HIGH COURT OF AUSTRALIA

                                       Attorney-General (Vic); Ex rel Dale

                                                           Vs.

                                                   Commonwealth

                     (Latham, C.J., Rich, Starke, Dixon, McTiernan and Williams JJ.)

                                                 19 November 1945

Latham C.J.

Demurrer to statement of claim in an action in which the Attorney-General for the State of Victoria
at the relation of certain officers of the Medical Society of Victoria sues the Commonwealth of
Australia, the Director-General of Health of the Commonwealth, and the Minister for Health of the
Commonwealth, for a declaration that the Pharmaceutical Benefits Act 1944 is invalid and void.
The defendants demur on the grounds that the facts alleged in the statement of claim do not show
any cause of action, that the Pharmaceutical Benefits Act is valid, and that the National Welfare
Fund Act 1943, which constitutes a trust fund, and the appropriation out of the fund of public
moneys by or under the authority of the Pharmaceutical Benefits Act, are within the legislative
powers of the Commonwealth Parliament.

It is contended for the defendants that the Pharmaceutical Benefits Act is authorized under the
power of the Commonwealth Parliament to make laws for the appropriation of money for the
purposes of the Commonwealth Constitution, s. 81. The plaintiff contends that the Act is much more
than an appropriation Act. It is not disputed that the Act is invalid as Federal legislation unless it can
be justified as a law appropriating public moneys.

It is argued for the plaintiff that the Attorney-General, as representing the interests of the public of
the State of Victoria, is entitled to take proceedings for a declaration of invalidity on the ground that
the Act is an attempt to usurp State legislative power: It is further argued that, if the appropriation of
moneys contained in the Act is illegitimate, the moneys which the Act purports to appropriate are
surplus revenue of the Commonwealth to which the States, including the State of Victoria, are
entitled under the Constitution, s. 94, by virtue of the Surplus Revenue Acts (No. 15 of 1908--No. 8
of 1910) and the State Grants Act (No. 4 of 1927), s. 5. I reject the second argument for the reason
that, if a State claims that surplus revenue is due to it from the Commonwealth, the proper course is
for the State to sue for payment of the sum due, and not to institute an action ex relatione a citizen
of the State by the Attorney-General of the State for a declaration that the sum is due. The right to
surplus revenue sought to be established is the right of the Crown as represented by the State, and
not a right of the general public which can be protected by an action ex relatione. If money is due
and unpaid it is recoverable by an ordinary action. An example of such an action is to be found in
New South Wales v. The Commonwealth[1], where New South Wales claimed moneys alleged to be
due as surplus revenue. I am therefore of opinion that the right of the Attorney-General to sue in this
form of action cannot be supported upon the ground (even if it be established) that the State of
which he is the Attorney-General is entitled to illegitimately appropriated (and therefore really
unappropriated) moneys of the Commonwealth as surplus revenue.
But upon the first ground there is, according to the decisions of this Court, a cause of action in the
Attorney-General for a declaration of the invalidity of Federal legislation as an invasion of a purely
State field of legislative power, and as therefore interfering with the public rights of the citizens of
the State, who are properly represented in litigation with respect to those rights by the Attorney-
General of the State: See Attorney-General for New South Wales v. Brewery Employés Union of New
South Wales[2]--see also Commonwealth v. Queensland[3] (where the Attorney-General for the
Commonwealth sued a State in order to obtain a declaration of the invalidity of State legislation);
Tasmania v. Victoria[4]; Attorney-General for Victoria v. The Commonwealth[5]. In the last-
mentioned case the position which has been established by the decisions of the Court is stated in the
following words by Gavan Duffy C.J., Evatt and McTiernan JJ.: "It must now be taken as
established that the Attorney-General of a State of the Commonwealth has a sufficient title to invoke
the provisions of the Constitution for the purpose of challenging the validity of Commonwealth
legislation which extends to, and operates within, the State whose interests he represents"[6].

The success of the action will, of course, depend upon whether the plaintiff can make out a case of
invalidity, but the claim by the Attorney-General of a State that Commonwealth legislation is
invalid because, not being justified by the powers conferred upon the Commonwealth Parliament by
the Constitution, it interferes with the exercise of State legislative powers is, according to our
decisions, a justiciable matter.

In stating this conclusion I do not express any opinion upon the question whether a State or a person
has locus standi to complain of a Federal appropriation Act which is simply an appropriation Act,
that is to say, which merely authorizes the expenditure of money: See Massachusetts v. Mellon[7].
Professor Sir Harrison Moore, in his work The Commonwealth of Australia, 2nd ed. (1910), p. 149,
said: "Appropriations of public money took nothing out of the pockets of the people: they were
burdens on the Crown or the revenue." In my opinion, for reasons to be stated, it is not necessary to
deal with this question in the present case.

The statement of claim alleges the enactment of the Pharmaceutical Benefits Act 1944, which
provides for the granting of pharmaceutical benefits to all persons ordinarily resident in the
Commonwealth without payment by such persons for such benefits, and for the payment by the
Commonwealth to approved pharmaceutical chemists at rates to be prescribed under the Act for the
supplying of the said pharmaceutical benefits. The payments to be made by the Commonwealth to
the chemists are, according to the Act, to be made out of a trust account established under the
National Welfare Fund Act 1943. The plaintiff alleges that the provisions of the Constitution do not
authorize the enactment of the Pharmaceutical Benefits Act or the appropriation of public moneys
for the purposes of the Act. The statement of claim proceeds to allege that the Parliament of the
State of Victoria has sole power in and for the State of Victoria to make laws with respect to the
subject matter of the challenged Federal Act, and further alleges that the Director-General of Health
and the Minister for Health intend to carry the Act into execution and to spend moneys of the
Commonwealth in so doing contrary to law.

The National Welfare Fund Act 1943 in s. 4 provides that there shall be a trust account, to be known
as the National Welfare Fund, which is to be a trust account for the purposes of s. 62A of the Audit
Act 1901-1934. Section 5 provides that there shall be paid out of the Consolidated Revenue Fund
"which is hereby appropriated accordingly, for the purposes of the National Welfare Fund, in each
financial year ... the sum of Thirty million pounds," or a sum equal to one-quarter of the amount
received in that financial year as income tax from individual persons, whichever is the less. Section
6 is as follows:--"Moneys standing to the credit of the National Welfare Fund shall be applied in
making such payments as are directed by any law of the Commonwealth to be made from the Fund,
in relation to health servi%22ces, unemployment or sickness benefits, family allowances, or other
welfare or social services."

Although s. 5 contains words of appropriation, the effect of the Act is only to establish a fund into
which moneys are paid. The Act may provide for expenditure in one sense (New South Wales v. The
Commonwealth[8]), but it does not itself contain any authority for expenditure of Commonwealth
moneys in the sense of payment out of the Treasury. Section 6 provides that moneys standing to the
credit of the fund shall be applied in making payments from that fund for what may generally be
described as social services if such payments are directed by any law of the Commonwealth to be
made from the fund. Such a "law" must be a valid law, and if it is a valid law no objection can be
raised against payments out of the fund. Accordingly, the National Welfare Fund Act itself does not
infringe any provision of the Constitution.

The Pharmaceutical Benefits Act 1944 provides a scheme of gratuitous pharmaceutical benefits
available to all persons resident in the Commonwealth, to be supplied through approved
pharmaceutical chemists and hospitals and other approved persons, the cost of the scheme to be met
out of Commonwealth moneys. The Act contains twenty-seven sections. Section 17 is as follows:--

       Payments in respect of pharmaceutical benefits shall be made out of the Trust Account
       established under the National Welfare Fund Act 1943 and known as the National
       Welfare Fund.

If this provision is valid it operates to authorize the application of Federal moneys in order to supply
the pharmaceutical benefits referred to in the Pharmaceutical Benefits Act.

It is not disputed by the defendants that, if this section were not contained in the Act, the Act would
be invalid, but it is said that s. 17 makes an appropriation of money and that all the other provisions
contained in the Act are incidental to this appropriation or to the purpose for which the money is
appropriated, namely the provision of pharmaceutical benefits. It is contended that s. 51 (xxxix.) of
the Constitution, which provides that the Parliament may make laws with respect to "Matters
incidental to the execution of any power vested by this Constitution in the Parliament ...", therefore
authorizes the enactment of the provisions other than s. 17. I agree that s. 51 (xxxix.) authorizes the
making of laws for the purpose of securing that public money is applied to the purposes for which it
is appropriated and not otherwise. But s. 51 (xxxix.), applied to the power to make laws for the
appropriation of money, though it authorizes legislation with respect to matters incidental to the
expenditure of the money, does not authorize legislation which is incidental only to the purposes for
which the money appropriated is to be expended, unless there is power to make laws for such
purposes.

The Act does more than merely define the pharmaceutical benefits to be provided by
Commonwealth expenditure. It contains provisions which (it is contended by the plaintiff) encroach
upon the sphere of State legislative power by assuming control of matters relating to public health
generally and also relating to the conduct of doctors, of pharmaceutical chemists, of hospitals, and
of persons dealing with them, and the possession and standards of drugs, medicines and medical and
surgical appliances.
Before examining the provisions of the Act in detail, it will be useful to consider the nature and
extent of the appropriation power of the Commonwealth Parliament.

The power of the Commonwealth Parliament to appropriate money, that is, to provide by law for the
expenditure of moneys of the Commonwealth, depends upon the terms of the Constitution. Section
83 provides that no money shall be drawn from the Treasury of the Commonwealth except under
appropriation made by law. Accordingly, any expenditure of Commonwealth money must be
authorized by a law made by the Commonwealth Parliament. It would not be sufficient, for
example, for one House only of the Parliament to pass a resolution approving a proposed
expenditure.

Section 81 is in the following terms:--

       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.

Section 82 is as follows:--

       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.

Sections 81, 82 and 83 are the provisions which introduce Chapter IV. of the Constitution, which is
entitled "Finance and Trade."

At one stage of the argument it was suggested on behalf of the plaintiff that the appropriation power
is limited to purposes for which the Commonwealth Parliament has power to make laws for the
reason that, with the exception of s. 96 (which provides for financial grants by the Commonwealth
to States), the only power to appropriate moneys to be found in the Constitution is that contained in
s. 51 (xxxix.). It was said that the power to spend money is incidental to the execution of the
Commonwealth powers to make laws with respect to the other subject matters mentioned in s. 51,
and it was suggested that, apart from placitum (xxxix.), there might not have been power to expend
money in connection with the various matters mentioned in placita (i.) to (xxxviii.).

In my opinion this argument cannot be accepted. Each power to make laws with respect to a
particular subject matter includes a power to make a law providing for the expenditure of money in
relation to that subject matter. For example, the power contained in s. 51 (vii.) to make laws with
respect to lighthouses, lightships, beacons and buoys in itself includes a power to provide for the
expenditure of money in relation to lighthouses, &c. The position is the same with respect to the
other subjects mentioned in s. 51.

Section 83 provides that no money shall be drawn from the Federal Treasury except under
appropriation made by law. Appropriation may be, and normally is, made by a Commonwealth
statute, but there are many provisions in the Constitution itself which either appropriate or authorize
the appropriation of moneys. I refer to s. 3--salary of the Governor-General; s. 48--allowances to
Members of Parliament; s. 66--salaries of Ministers; s. 72--salaries of judges; s. 84--payments to
transferred State officers; s. 85--payments for State property taken over by the Commonwealth.
Sections 87, 89, 93 and 94 all relate to payments to be made by the Commonwealth to the States.
Section 96 expressly authorizes the Parliament to grant financial assistance to any State; ss. 105 and
105A provide for the application of Commonwealth money towards payment of interest and
principal of the debts of the States. Under s. 122 the Commonwealth Parliament may spend Federal
moneys as it thinks fit in the Territories of the Commonwealth.

It is plain, therefore, that appropriations are made, or may be made, by law otherwise than under the
powers contained in s. 51 (xxxix.) of the Constitution.

It was argued for the plaintiff that the phrase "the purposes of the Commonwealth" in s. 81 refers to
legislative purposes of the Commonwealth, that is, purposes for which the Commonwealth
Parliament has power to make laws. It is plain that the Commonwealth has executive and judicial
purposes as well as legislative purposes. The very existence of the Commonwealth, apart from any
legislation, creates some purposes of the Commonwealth: See Commonwealth v. Colonial Combing,
Spinning and Weaving Co. Ltd.[9]. But as laws may be made with respect to executive and judicial
purposes, legislative purposes could be held to include the other purposes mentioned. The principal
argument for the plaintiff was that a Commonwealth purpose (for which alone appropriation of
money is said to be legitimate) must be found in powers conferred upon the Parliament by some
other provision than s. 81; that s. 81 conferred no legislative power whatever, but was based upon
the assumption that the purposes of the Commonwealth were defined or limited by other provisions
of the Constitution; so that "the purposes of the Commonwealth" must be construed as meaning
"purposes for which the Commonwealth Parliament has power to make laws."

But when it was desired to refer to the legislative purposes of the Commonwealth in this sense a
definite and unambiguous phrase was used. Section 51 (xxxi.) is a provision that the Parliament
shall have power to make laws with respect to "The acquisition of property on just terms from any
State or person for any purpose in respect of which the Parliament has power to make laws." This is
a precise and particular reference to the legislative purposes of the Commonwealth. In s. 81 a
different phrase is used, namely, "the purposes of the Commonwealth." In my opinion it would be
contrary to wellrecognized principles of statutory construction to regard these distinct phrases as
identical in meaning unless, indeed, there were something in the context which showed that they
must be so construed. I have been unable to discover any reason in the terms of the Constitution for
regarding such different phrases as identical in meaning. Prima facie at least, such a definite
difference in language points to a real difference in signification.

It is contended for the defendants that the provision that Federal revenues shall form one
consolidated fund "to be appropriated for the purposes of the Commonwealth in the manner and
subject to the charges and liabilities imposed by this Constitution" in itself confers a power to
appropriate money for "the purposes of the Commonwealth," which power is to be exercised by
making laws--s. 83. The plaintiff, on the other hand, contending that these words do not confer any
legislative power, submits that all the words in s. 81 after the words "one Consolidated Fund"
produce no effect, but merely repeat provisions to be found elsewhere in the Constitution. Prima
facie no words in any statute should be regarded as meaningless, but I admit that I find it difficult to
give any effect to the words "in the manner and subject to the charges and liabilities imposed by this
Constitution." Sections 53, 54 and 56 of the Constitution contain provisions relating to the manner
in which laws appropriating money shall be made. Section 81, in its provision with respect to the
"manner" of making appropriations by law, adds nothing to those provisions. The same observation
must, I think, be made with respect to the words "subject to the charges and liabilities imposed by
this Constitution." Those charges and liabilities are imposed by the Constitution independently of
the reference to them in s. 81. I therefore agree that some of the words in s. 81 have no practical
effect. But a meaning should, if possible, be attached to all the words used. There may be difficulty
in finding any effective meaning for the words referring to "manner" and "charges and liabilities,"
but the position is different in the case of the words "for the purposes of the Commonwealth." These
words can be interpreted as providing that all appropriations (which must be "made by law"--s. 83)
must be for purposes which can be shown to be purposes of the Commonwealth. In other words,
there cannot be appropriations in blank, appropriations for no designated purpose, merely
authorizing expenditure with no reference to purpose. An Act which merely provided that a minister
or some other person could spend a sum of money, no purpose of the expenditure being stated,
would not be a valid appropriation Act.

But this statement only raises the question: What are purposes of the Commonwealth within the
meaning of the section?

I approach the consideration of this question with the prima facie opinion that the words "purposes
of the Commonwealth" (which plainly include purposes "in respect of which the Parliament has
power to make laws") are not identical in meaning with the latter words. I have already stated my
opinion that each such power includes a power to authorize the expenditure of money. A meaning is
given to the words "to be appropriated for the purposes of the Commonwealth" if they are read as
intended to show positively that there may be other Commonwealth purposes than those in respect
of which power to make laws is given elsewhere in the Constitution. Otherwise the words have no
legal effect whatever.

What then is the authority which can determine what purposes are purposes of the Commonwealth?
As the appropriation is to be made by law (s. 83), the natural answer is--the authority which makes
Commonwealth laws, that is, the Commonwealth Parliament, not the executive authority which
administers laws when made, nor the judicial authority which interprets and applies the laws. Thus,
in my opinion, the Commonwealth Parliament has a general, and not a limited, power of
appropriation of public moneys. It is general in the sense that it is for the Parliament to determine
whether or not a particular purpose shall be adopted as a purpose of the Commonwealth. I take as
illustrations some past appropriations for purposes in relation to which the Parliament has approved
the expenditure of moneys but where, when the purposes are considered in themselves, there is no
power to legislate with respect to the matters to which the expenditure relates. In some cases there is
only an appropriation of money for the purpose stated, in other cases there are statutes containing
detailed provisions for the establishment of organizations for the purpose of spending the money. I
mention appropriations for Antarctic exploration, medical research, literary grants and pensions,
subscriptions to international organizations, such as the Agricultural Institute at Rome, public
health, assistance to distressed Australians abroad. Among statutes I mention those conveniently to
be found under the heading of Research and Science in vol. III. of the Commonwealth Acts 1901-
1935--Institute of Anatomy, Economic Research, Forestry Bureau, Geo-physical Survey, Science
and Industry, Endowment and Research. (I omit the Act relating to a Solar Observatory at Canberra,
because there is no doubt that, in relation to the Territories of the Commonwealth, the Parliament
has a quite general power of appropriation for any purpose whatever.) The application of
Commonwealth moneys to these objects, so far as it merely involves the expenditure of money, is,
in my opinion, authorized by the Constitution. Such expenditures do not interfere with the rights of
the States or of any persons, and if the Commonwealth Parliament approves the expenditure there is,
in my opinion, full legal justification for the expenditure.

The Supreme Court of the United States has taken the same view of the Constitution of the United
States. Alexander Hamilton was of opinion that the appropriation power was a general power in the
sense which I have stated. Madison , on the other hand, took a more limited view of the nature of
that power. The controversy, after proceeding for many years, has ultimately been resolved by
recent decisions which have definitely adopted Hamilton's view (United States v. Butler[10];
Helvering v. Davis[11]; Charles C. Steward Machine Co. v. Davis[12]). The reasoning upon which
these decisions are based, however, depends in large measure upon the fact that the Constitution of
the United States in section VIII., dealing with the legislative powers of Congress, provides: "The
Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts and
provide for the common defense and general welfare of the United States ..." The power to tax is
here closely associated with the power to spend. This article has been interpreted as meaning that
the power to spend money for the general welfare is correlative with the taxing power. The taxing
power of Congress is unlimited and, accordingly, it has been held that the power to spend money is
similarly unlimited. This precise argument does not apply to the Australian Constitution, because
there is not the same collocation and association of words.

But the Commonwealth Constitution does contain a completely general power (subject to one
qualification) to legislate with respect to taxation. This power is contained in s. 51 (ii.)--"The
Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and
good government of the Commonwealth with respect to ...: (ii.) Taxation; but so as not to
discriminate between States or parts of States." The prohibition of discrimination is a limitation
upon the taxing power. A law with respect to taxation must be a law for the peace, order and good
government of the Commonwealth. It has not hitherto been suggested that this provision, which is
not easily distinguishable from a power to make laws "to provide for the general welfare," makes it
even theoretically possible for a court to declare that a taxing law is invalid upon the ground that the
law providing for the tax is not a law for the peace, order and good government of the
Commonwealth. (I omit any reference to territorial limitations upon legislative power, because they
are irrelevant for the present purpose.) The decision whether any particular taxation Act is or is not
a law for the peace, order and good government of the Commonwealth depends entirely upon the
will of the Commonwealth Parliament. There is no legal criterion which would enable any court to
decide that one tax is valid as falling within this description, and that another tax is invalid because
not falling within the description. The determination whether legislation with respect to any of the
subject matters mentioned in s. 51 is for the peace, order and good government of the
Commonwealth is entirely a political matter, and not a matter for determination by any court.

Similarly, in my opinion, the determination whether a particular purpose should be regarded and
adopted as a Commonwealth purpose is a political matter. If the proposed limitation to "legislative
purposes" in the sense stated is rejected, no test has been suggested which would enable a court to
undertake a judicial review upon any legal basis of the multifarious expenditure which a Parliament
may consider it necessary or desirable to undertake.

The words "purposes of the Commonwealth" should not, in my opinion, be construed as meaning
for the governmental purposes of the political organism called the Commonwealth. In the
introductory provision of s. 51 (that laws are to be made for the peace, order and good government
of the Commonwealth) the word "Commonwealth" is used to describe the people of the
Commonwealth in the area which is the Commonwealth in the geographical sense. The laws of the
Commonwealth operate directly upon the people of Australia, and it is the good government of
those people with which the Constitution is concerned, not the government of the Government
itself. In s. 81 in the phrase "the purposes of the Commonwealth" the word "Commonwealth"
should, in my opinion, be interpreted in the same sense. The word "Commonwealth" there plainly
does not mean the geographical area known as the Commonwealth. Neither, in my opinion, does it
mean the Commonwealth as a political organism. I see no reason for limiting the words "the
purposes of the Commonwealth" to governmental purposes in the sense of the discharge of
legislative, judicial or executive functions. The word "Commonwealth" in this section refers to the
people who, by covering clause 3 of the Constitution, are "united in a Federal Commonwealth under
the name of the Commonwealth of Australia."

For these reasons, in my opinion, the provisions of s. 81 can fairly be read as intended to mean that
it is the Commonwealth Parliament, and not any court, which is entrusted with the power, duty and
responsibility of determining what purposes shall be Commonwealth purposes, as well as of
providing for the expenditure of money for such purposes.

This conclusion, however, relates only to laws providing for the expenditure of money. It does not
follow that the Commonwealth Parliament, because it can, as it were, subscribe towards the support
of what it considers to be worthy objects, can take legislative control of matters relating to any such
objects in respect of which there is no other grant of legislative power. A company may have power
to subscribe to a hospital or a football club without having power to conduct a hospital or to
organize and control a football club.

I illustrate the position as I understand it by taking public health legislation as an example. Under s.
51 (ix.) the Commonwealth Parliament has power to make laws with respect to quarantine.
Quarantine legislation may be regarded in most, if not all, of its aspects as a particular form of
public health legislation. In relation to quarantine the Commonwealth Parliament has full powers of
legislation. It can not only provide that money shall be spent upon quarantine, but it can devise and
put into operation a whole compulsory system of quarantine under which duties can be imposed
upon persons and penalties inflicted for breach of the law. But in relation to other aspects of public
health the Commonwealth (once again leaving out of account the Territories) has no such power of
legislation. The Commonwealth can, in my view, authorize the expenditure of public money on
inquiries, investigations, research and advocacy in relation to matters affecting public health. But
the Parliament could not pass a law requiring citizens of the States to keep their premises clean or to
submit to vaccination or immunization. The power to appropriate and expend money, however wide
that power may be, does not enable the Commonwealth to extend its legislative powers beyond
those marked out and defined by the Constitution, although (in my opinion) those powers include a
general appropriation power.

The attack upon the Pharmaceutical Benefits Act is based upon the contention that it invades the
State legislative arena. I do not regard any objection to Commonwealth legislation as well-founded
which begins with the proposition that a certain area of possible legislation is reserved to the States.
The proposition that some area is so reserved may emerge as a conclusion from other propositions,
but it cannot be adopted as an original premise. The first inquiry into the validity of any
Commonwealth legislation is an inquiry into Commonwealth power, not into State power. If the
legislation is legislation with respect to a subject with respect to which the Commonwealth
Parliament has power to make laws, and if it is not prohibited by some provision of the
Constitution, the legislation is valid and prevails over any inconsistent State legislation:
Constitution, s. 109. When the Commonwealth power has been defined, an Act which is authorized
under the power must be held to be valid (in the absence of any relevant prohibition), whatever may
be the effect upon actual or potential State laws. The States are the residuary legatees of legislative
power and the specific grants of power to the Commonwealth are not to be construed by first
assuming the content of the residue (Amalgamated Society of Engineers v. Adelaide Steamship Co.
Ltd.[13]).

The question therefore is whether the Pharmaceutical Benefits Act falls within the sphere of
Commonwealth legislative power. If it is an Act for the appropriation of money, s. 51 (xxxix.) of the
Constitution would authorize the inclusion in the Act of provisions to prevent the use of the money
for purposes other than those declared by Parliament. But the power to make laws for the
appropriation of money can go no further than this. If the Act can properly be described as an Act
for the appropriation of money with safeguards against wrongful expenditure of the money, it is in
my opinion valid. If, on the other hand, it is an Act which, though it appropriates money, is really an
Act for the control of doctors, chemists, sale of drugs and the conduct of persons who deal with
doctors and chemists, then in my opinion it is invalid, for the reason that the Act is an Act with
respect to subjects which are not committed to the Federal Parliament.

The Act contains provisions for the approval of pharmaceutical chemists and the free supply to
customers of medicines &c. by them, the Commonwealth paying the chemists. Only approved
chemists can supply pharmaceutical benefits in accordance with the Act, and it is obvious that the
result of the operation of the Act might be that chemists would in practice be compelled to apply for
approval or to lose a great deal of their business. Similarly, doctors might practically be compelled
to write prescriptions in accordance with the Commonwealth Formulary so that their patients could
obtain medicines &c. free--or the doctors would run the risk of losing their practice. I do not,
however, base my conclusion with respect to the validity of the Act upon these probable
consequences of its operation. From the point of view of the law a chemist is free to abstain from
applying for approval and a doctor is free not to use the Commonwealth Formulary in the prescribed
form. But there are various provisions in the Act, essential to its operation, which purport to confer
rights and to impose duties. I proceed therefore to examine the Act in detail.

Section 4 of the Act contains definitions of "hospital authority," "medical practitioner,"
"pharmaceutical benefits," "pharmaceutical chemists." Sections 5 and 6 provide for administration.
Sections 7 and 8 are as follows:--

             7.

             The pharmaceutical benefits referred to in this Act shall consist of--

             (a)

             uncompounded medicines the names of which, and medicinal compounds the
             formulae of which, are contained in a prescribed formulary to be known as the
             Commonwealth Pharmaceutical Formulary; and

             (b)

             materials and appliances (not being uncompounded medicines or medicinal
             compounds) the names of which are contained in a prescribed addendum to the
             Commonwealth Pharmaceutical Formulary.
             8.

                   (1)

             Subject to this Act, every person ordinarily resident in the Commonwealth shall be
             entitled to receive pharmaceutical benefits.

                   (2)

             A person receiving any pharmaceutical benefit in accordance with this Act shall
             not be under any obligation to make any payment therefor to the person supplying
             the pharmaceutical benefit.

                   (3)

             Notwithstanding the provisions of the last preceding sub-section, a person
             supplying a pharmaceutical benefit in accordance with this Act shall be entitled to
             make such special charges (if any) as are prescribed.

The effect of these provisions is that every person ordinarily resident in the Commonwealth is
entitled to receive, without making any payment, pharmaceutical benefits as specified in the
Commonwealth Pharmaceutical Formulary. Section 19 provides that there shall be a Formulary
Committee, which, presumably, will settle the Formulary. Section 21 provides that it shall be an
offence for any person to demand or receive any payment in respect of any pharmaceutical benefit
supplied in accordance with the Act from the person to whom the benefit was supplied.

Section 8 (1) provides that persons ordinarily resident in the Commonwealth shall be entitled to
receive the medicines, appliances, etc., contained in the Formulary. This section, if valid, gives, by a
Federal law, a right to such persons. If it is valid, any State law which is inconsistent with it
becomes inoperative. Thus a State law which prohibited the obtaining of a medicine or appliance
contained in the Formulary would not operate. So also (by reason of s. 8 (2)) a State law would be
inoperative if it required payment for such things to be made by the person to whom they were
supplied. There is no reason for doubt that such provisions as s. 8 (1) and (2), taken by themselves,
cannot be supported under any power conferred by the Constitution upon the Commonwealth
Parliament. Is this position changed by the fact (s. 13 and s. 17) that the Commonwealth is prepared
to pay for the medicines &c.? In my opinion the answer to this question must be in the negative.
The provision that the Commonwealth will pay for the medicines &c. has no relation whatever to
the provisions of s. 8 that a person shall have a right to get medicines &c. and that he shall not pay
for them. The grant of money is one thing: the creation of a right which will prevail over State laws
is an entirely different thing. There is no category of Commonwealth legislative power which can
justify such Federal legislation as is contained in s. 8 (1) and (2). Sub-section (3) is open to a similar
objection.

Hospitals as well as individual persons are entitled to receive pharmaceutical benefits--ss. 11, 13. If
this is a right effectively granted by Federal law, it cannot be affected or prejudiced by any State
legislation. But once again there is no category of Federal legislative power under which such a
provision (which would deprive the States of some forms of hospital control) may be enacted.
There is a provision in s. 22 which directly controls the conduct of medical practitioners. It provides
that: "A medical practitioner shall not write a prescription in accordance with any prescribed form
unless he is satisfied, by personal examination of the person in respect of whom the prescription is
written, that the pharmaceutical benefit specified in the prescription is necessary for the treatment of
that person. Penalty: Fifty pounds or imprisonment for three months." Section 27 provides for the
making of regulations by the Governor-General prescribing matters which are required or permitted
to be prescribed. Thus, under ss. 22 and 27, a common form of prescription, possibly universally
used by doctors, could be prescribed, and then a doctor could not use that prescription unless the
conditions of s. 22 were satisfied. Probably s. 22 would be interpreted also to mean that a "repeat"
prescription could never be written without a further personal examination of the patient on each
occasion. Some such provision may be thought necessary in a scheme for providing free medicine.
This provision directly and compulsorily operates in relation to medical practitioners by preventing
them carrying on their practice as they may be allowed to carry it on under the laws of the State. In
my opinion the Commonwealth Parliament has no power to control medical practice in this manner.
The position cannot be altered by the fact that the Commonwealth is prepared to pay for any
medicine &c. specified in the Formulary which the doctor may prescribe for a patient.

Section 23 provides, inter alia, that a person shall not "obtain any pharmaceutical benefit to which
he is not entitled." The pharmaceutical benefits are defined in s. 4 of the Act as meaning
pharmaceutical benefits specified in s. 7. Section 7, which has already been quoted, provides that
the pharmaceutical benefits referred to in the Act shall consist of medicines and appliances, the
names of which are contained in the Commonwealth Formulary or in an addendum thereto. Section
7 therefore relates simply to certain substances and appliances named in the Formulary or
addendum, e.g. quinine or a truss, not to such things when supplied under or in accordance with the
Act. Quinine and trusses are, according to the Act, pharmaceutical benefits (if contained in the
Formulary or addendum), whether they are in fact supplied free to anybody under the Act or not.
Accordingly, anyone who "obtained" quinine or a truss "to which he was not entitled" (presumably
under the Act) would be guilty of an offence. Anyone who bought quinine or a truss in the ordinary
way would be obtaining "a pharmaceutical benefit," namely quinine or a truss, and he would not be
entitled to it under the Act. The person who accepted payment would be guilty of an offence against
s. 21 of the Act and would be liable to a penalty of £50 or imprisonment for three months. There is
no Commonwealth head of power to which such legislation can be referred. Again, the grant of
money does not affect the matter.

Section 23 (1) (d) provides that a person shall not, not being a medical practitioner, write a
prescription in accordance with the prescribed form. The effect of this section is that the Governor-
General may prescribe a form of prescription, and that anyone who is not a medical practitioner
who thereafter writes down the words of the prescription is guilty of an offence. There is no head of
Commonwealth power which can justify such a provision in a Federal law, and the fact that the
Commonwealth makes a grant of money for free medicines &c. does not alter this fact.

Section 25 is as follows:--

       For the purposes of this Act, any person authorized by the Minister or the Director-
       General to act under this section may--

             (a)

             enter at all reasonable times the premises of any approved pharmaceutical chemist;
             (b)

             make such examination and inquiry as he thinks fit for the purposes of ascertaining
             whether the provisions of this Act are being complied with;

             (c)

             take samples of drugs, medicines, substances, materials or appliances which may
             be supplied as pharmaceutical benefits;

             (d)

             examine any person employed in any such premises with respect to any matter
             under this Act; and

             (e)

             exercise such powers and functions as are prescribed.

The powers sought to be conferred by this section are extensive and far-reaching. Under s. 25 (b) an
authorized person may make such examination and inquiry (apparently from any person or in any
place) as he thinks fit as to whether the provisions of the Act are being complied with. Refusal to
submit to such examination and inquiry would, if the provision is valid, be an offence: See Crimes
Act 1914-1932, s. 76. Section 25 (b) is not a provision for the expenditure of Commonwealth
money, nor is it incidental to such expenditure. It is incidental only to a scheme for providing free
medicine &c. Under s. 25 (c) an authorized person may take samples of any drugs, medicines,
substances, materials or appliances "which may be supplied as pharmaceutical benefits." Under this
provision such a person could take samples of any drugs &c. whatever upon the ground that they
might thereafter be supplied as pharmaceutical benefits. Under this power samples could be taken
from persons who had nothing whatever to do with the pharmaceutical benefits scheme. This
provision might well be part of a scheme for controlling the sale of drugs &c., but it goes beyond
authorizing the expenditure of money.

Under s. 27 the Governor-General may make regulations for prescribing, inter alia, the standards or
composition or purity of pharmaceutical benefits subject to which payments in respect of the supply
thereof shall be made. It may be that a State Parliament would prohibit the use of certain drugs &c.
altogether. But under s. 27 (if it were valid) the Governor-General could prescribe a standard
inconsistent with the State standard, and then persons would have the (Federal) right to receive
drugs the possession of which might be prohibited by State law. There is no power in this field to
create such a paramount Federal right.

Federal legislation, when it is valid, does not exist on sufferance it prevails over all inconsistent
State legislation (Constitution, s. 109). Where the Commonwealth Parliament is expressly
empowered to make a particular benefit available to the people as, for example, in the case of
invalid and old-age pensions, there is, in my opinion, no doubt that the Commonwealth Parliament
would have power to legislate to prevent any State interfering with the operation of a scheme
approved by the Commonwealth Parliament. State legislation to the effect that no person residing in
a State should accept a Commonwealth invalid or old-age pension could certainly not prevail over
any Federal legislation with which it was inconsistent. It would be inconsistent with a Federal law
which declared that such persons should be entitled to such a pension. But it was conceded in
argument for the defendants that in the case of the Pharmaceutical Benefits Act, although the
Commonwealth Parliament had power to confer the benefits and to provide a scheme for their
administration, any State Parliament could pass valid laws which were inconsistent with the
Commonwealth law, and that it would be the Commonwealth law, and not the State law, which
would become inoperative in that State. It was necessary to make this concession in order to avoid
the admission that the validity of the Act would mean that the State Parliaments were prevented by
the Act from legislating with respect to many matters relating to doctors, chemists, hospitals,
medicines &c. But the conception of valid Federal law being subordinate to any State law is, in my
opinion, completely inconsistent with the whole basis of the Federal Constitution. The Constitution
is founded upon the principle that valid Commonwealth legislation renders inconsistent State
legislation inoperative and, in my opinion, does not leave room for the view that Commonwealth
legislation expressed in general terms can be rendered either invalid or legally inoperative in
particular States by State legislation. But I do not base this judgment in any way upon this
concession.

For the reasons stated I reach the conclusion that the Court should not accept the only argument
which has been used in support of the validity of the Act, namely that the Act is an exercise of the
power of the Commonwealth Parliament to make laws for the appropriation of public money. The
Act is far more than an appropriation Act; it is just the kind of statute which might well be passed
by a parliament which had full power to make such laws as it thought proper with respect to public
health, doctors, chemists, hospitals, drugs, medicines and medical and surgical appliances. The
Commonwealth Parliament has no such power. The result of a contrary view would be that, by the
simple device of providing for the expenditure of a sum of money with respect to a particular
subject matter, the Commonwealth could introduce a scheme which in practice would completely
regulate and control that subject matter. The Commonwealth Parliament would thus have almost
unlimited legislative power. The careful delimitation of Commonwealth powers made by the
Constitution prevents the adoption of such an opinion.

Argument in this case commenced on 5th October and was completed on 10th October. It is proper
to refer to the fact that on 10th October assent was given by the Governor-General to the
Pharmaceutical Benefits Act 1945. That Act repealed and amended certain sections of the
Pharmaceutical Benefits Act 1944. No question as to the validity of the 1945 Act is raised by these
proceedings. The repeals and amendments made by that Act do not, however, affect the substantial
character of the original Act. I have considered each particular provision of the amending Act and
none of them are of such a nature as to affect the conclusions which I have stated.

In my opinion, for the reasons stated, the demurrer should be overruled.

Rich J.

This case submits two questions for our determination. The first question which stands on the
threshhold is whether the Attorney-General is competent to challenge the validity of the Act the
subject of the action. A similar question arose in previous decisions of this Court, and for myself I
adhere to what I said in Tasmania v. Victoria[14] and Attorney-General for Victoria v. The
Commonwealth[15], and accordingly determine that he is entitled to maintain the action. The second
question has been fully dealt with in the judgment of my brother Dixon, which I have had the
advantage of reading, and as I am in substantial agreement with his reasons I cannot usefully add to
them.

The demurrer should be overruled.

Starke J.

Demurrer: The question is whether the Pharmaceutical Benefits Act 1944 is within the
constitutional power of the Commonwealth. The object of the Act is to make provision for the
supply of pharmaceutical benefits to persons ordinarily resident in Australia without any obligation
to make any payment therefor to the person supplying the pharmaceutical benefit. The benefits
consist of medicines the formulae of which are contained in the Commonwealth Pharmaceutical
Formulary and materials and appliances the names of which are contained in an addendum to the
Formulary.

Pharmaceutical chemists who are willing to supply such benefits may be approved by the Director-
General of Health, and no person is entitled to receive any benefits except from an approved
chemist and on presentation of a written order in a prescribed form by a medical practitioner. The
payments in respect of such benefits are made out of the trust account established under the
National Welfare Fund Act 1943, which appropriates the sum of thirty million pounds in each
financial year for the purposes of the National Welfare Fund, which is a trust account established by
the Act. And moneys standing to the credit of the National Welfare Fund shall be applied in making
such payments as are directed by any law of the Commonwealth to be made from the fund, in
relation to health services, unemployment or sickness benefits, family allowances, or other welfare
or social services. The Pharmaceutical Benefits Act provides for payment of approved chemists who
supply benefits in accordance with the Act. And agreements may be entered into with medical
practitioners providing for their services without charge to members of the public for the purpose of
furnishing prescriptions and orders for the purposes of the Act. And powers are given to enter the
premises of any approved chemist, take samples of drugs and materials and exercise such other
powers and functions as may be prescribed. And various sanctions are imposed by the Act which I
shall do no more than mention.

Constitutional authority for the Act was referred to: s. 81 and s. 51 (xxxix.) of the Constitution. No
authority for the Act can be found in any other constitutional power of the Commonwealth.

"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" (Constitution, s. 81). And "no money shall be drawn from the Treasury of the
Commonwealth except under appropriation made by law" (Constitution, s. 83). And the Parliament
has, subject to the Constitution, power to make laws for the peace, order and good government of
the Commonwealth with respect to matters incidental to the execution of any power vested by this
Constitution in the Parliament or in either House thereof, or in the Government of the
Commonwealth, or in the Federal Judicature, or in any department or officer of the Commonwealth
(Constitution, s. 51 (xxxix.)). The Commonwealth contends that this power of appropriation is
unlimited, that the Parliament can appropriate the revenues and moneys of the Commonwealth for
any purpose it thinks proper, and that the appropriation of the revenues and moneys of the
Commonwealth is a political decision, which is not examinable in any court of law. And the
incidental power, it is contended, enables the Parliament to enact such legislation as it deems
necessary or expedient for effectuating any appropriation.
Undoubtedly in the United States the power of appropriation seems unlimited and the source of that
power is referred to the constitutional provisions that Congress shall have power to dispose of and
make all needful rules and regulations respecting the territory or other property belonging to the
United States (Art. IV., s. 3), and to lay and collect taxes, duties, imposts and excises to pay the
debts and provide for the common defence and the general welfare of the United States (Art. I., s. 8
and Preamble; Willoughby on the Constitution of the United States, 2nd ed. (1929), vol. 1, p. 98 et
seq.; Willis's Constitutional Law of the United States, p. 393; United States v. Butler[16]; Helvering
v. Davis[17]).

The Commonwealth power of appropriation, however, is explicit; it is for the purposes of the
Commonwealth in the manner and subject to the charges and liabilities imposed by the Constitution.
This power must be construed liberally; it is a great constitutional power, but it does not authorize
the Commonwealth appropriating its revenues and moneys for any purpose whatever "without
regard to whether the object of expenditure is for the purpose of and incident to some matter which
belongs to the Federal Government" (Harrison Moore, Constitution of the Commonwealth of
Australia, 2nd ed. (1910), pp. 523-527). Indeed, the provisions in s. 96 of the Constitution for
financial assistance to the States appear superfluous if the power of the Parliament were as extensive
as is now claimed. The purposes of the Commonwealth are those of an organized political body,
with legislative, executive and judicial functions, whatever is incidental thereto, and the status of the
Commonwealth as a Federal Government. And where else but from the Constitution and other Acts
conferring authority upon the Commonwealth can its purposes or functions be discovered? Those
purposes include matters in respect of which it can make laws by virtue of the Constitution or any
other Act, and they also include the exercise of executive and judicial functions vested in the
Commonwealth by the Constitution or by any other Act. Among other purposes of the
Commonwealth must also be included, I think, matter arising from the existence of the
Commonwealth and its status as a Federal Government. Thus, I should think that moneys
appropriated for payment &c. of members of Parliament, exploration and so forth, would be within
the authority of the Commonwealth.

But the Pharmaceutical Benefits Act 1944 is beyond any purpose of the Commonwealth. No
legislative, executive or judicial function or purpose of the Commonwealth can be found which
supports it, and it cannot be justified because of the existence of the Commonwealth or its status as a
Federal Government.

I would add, that if the Commonwealth had unlimited power to appropriate its revenues and moneys
for any purpose that it thought proper, then I should have some difficulty in denying to the
Commonwealth power to provide for the manner and method of its expenditure under the incidental
power in the Constitution.

An objection was taken to the competence of this action based upon the decision of the Supreme
Court of the United States in Massachusetts v. Mellon[18], but this objection has long been
untenable in this Court, having regard to its own decisions (Attorney-General for N.S.W. v. Brewery
Employés Union of N.S.W.[19]; Tasmania v. Victoria[20]; Attorney-General for Victoria v. The
Commonwealth[21]).

The demurrer should be overruled.

Dixon J.
The purpose of this suit is to obtain a decision concerning the validity of the Pharmaceutical
Benefits Act 1944. The demurrer of the Commonwealth to the statement of claim raises two
questions. The first is whether the suit is maintainable at all, and the second, if the suit be
maintainable, is whether the Act is invalid.

I have felt more difficulty with reference to the first question than I have been able to find in the
second. For the legislation appears to me only too clearly to be ultra vires. In discharging our duty
of passing upon the validity of an enactment, we should make every reasonable intendment in its
favour. We should give to the powers conferred upon the Parliament as ample an application as the
expressed intention and the recognized implications of the Constitution will allow. We should
interpret the enactment, so far as its language permits, so as to bring it within the application of
those powers and we should not, unless the intention is clear, read it as exceeding them. Then, if it
appears impossible to refer all the provisions of a statute to the legislative power belonging to the
Parliament, we should examine it to see whether there is any divisible part of the legislation for
which support can be found. But when all this has been done, the Pharmaceutical Benefits Act
emerges as a statute which must be held completely invalid upon the simple ground that it is not
relevant to any power which the Constitution confers upon the Parliament. It is entitled an Act to
make provision for the supply of pharmaceutical benefits, and the title describes its central purpose.
The purpose is carried out with some elaboration by the enactment, which provides a detailed and
coherent plan. It is enough to state briefly the chief features of the plan. A pharmaceutical formulary
is to be prepared on behalf of the Commonwealth containing formulae for uncompounded
medicines and medicinal compounds and to it there is an addendum naming materials and
appliances. The expression "pharmaceutical benefits" is used to describe what is contained in the
formulary and the addendum. Pharmaceutical chemists who are willing to supply such benefits may
obtain approval for the purposes of the Act. A chemist, when approved, must display at his shop a
sign in a prescribed form showing that he is an approved chemist. He must, on presentation by a
customer of a prescription, in proper form, signed by a medical practitioner, supply the medical
benefit mentioned in the prescription and he must make no charge to the customer. If he demands
any payment from the customer he commits an offence. He is entitled to be paid by the
Commonwealth but at rates fixed, not by him, but by regulations made under the Act. He may not
supply the same pharmaceutical benefit again to the customer unless the prescription is renewed or a
fresh one is presented. Forms of prescription are to be furnished to medical practitioners, but a
medical practitioner may not use the form for a prescription unless by a personal examination of the
person prescribed for, or by some other sufficient means, he is satisfied of the necessity for the
prescription. If he fails in this respect, he commits an offence. Various other offences are created.
Most of them are directed at repressing dishonesty or abuse of the plan. Among them is one that has
wider implications. It penalizes anybody who is not a duly registered or licensed medical
practitioner if he writes a prescription in accordance with the form. There are powers of entry upon
the premises of approved chemists and of examination and inquiry, including the taking of samples,
and there are powers to make regulations for carrying out or giving effect to the Act and in
particular for a number of specified purposes. Two independent powers are specifically given to the
Minister administering the Act the exercise of which would take its operation further. One of them
enables him to make special arrangements for those living in isolated areas or under special
conditions to supply them with benefits in lieu of those provided for by the Act. The other
empowers him to enter into agreements with medical practitioners providing that their services shall
be available without charge to members of the public for the purpose of furnishing prescriptions and
orders under the Act.

An amending Act, passed while these proceedings were pending, provides for bringing certain
provisions into immediate operation, for the approval of the premises at which pharmaceutical
benefits may be supplied by approved chemists, for limited approval in the case of dispensaries of
friendly societies and for some other minor matters.

It need hardly be said that the subject of the foregoing legislation does not fall within any of the
enumerated matters that are assigned by the Constitution to the legislative power of the
Commonwealth. No one has suggested the contrary. In attempting to support the validity of the Act,
counsel relied only on the power of expenditure and upon the incidental power. There is, indeed,
nothing else which he could possibly invoke. But I am unable to think that, even with the widest
conceivable construction of the power of appropriation and the fullest application thereto of the
power to make laws with respect to incidental matters, any sufficient support can be found there for
the Pharmaceutical Benefits Act.

Though, of course, the expenditure of money is indispensable to the scheme of the Act yet, as
appears from the foregoing, it contains a general legislative plan covering much more than the
spending of money and involving, moreover, control and regulation by law operating directly upon
the individual. It was said that s. 81 of the Constitution, in referring to appropriation for the
purposes of the Commonwealth, empowers the Parliament to expend money for any purpose that is
for the benefit of the people of the Commonwealth, or for the advancement of their interest and that,
for the rest, s. 51 (xxxix.) warranted an amplification or extension of the area of legislation once the
description of benefit or advancement had been determined on. This is not the view which in the
past I have entertained of the power of appropriation given by s. 81 and of the requirement
expressed by s. 83 that the appropriation must be "by law." No-one, I think, suggests, and I certainly
do not, that any narrow interpretation or application should be given to these provisions. Even upon
the footing that the power of expenditure is limited to matters to which the Federal legislative power
may be addressed, it necessarily includes whatever is incidental to the existence of the
Commonwealth as a state and to the exercise of the functions of a national government. These are
things which, whether in reference to the external or internal concerns of government, should be
interpreted widely and applied according to no narrow conception of the functions of the central
government of a country in the world of to-day. There is no reason why such matters should be
taken to fall outside the province of Federal appropriation though ascertained and defined by
reference to the legislative power of the Commonwealth. But the claim is made that, under ss. 81
and 83, the Parliament has power to authorize the expenditure of money without any limitation of
purpose. The claim means that, though the Commonwealth is a government of defined and
enumerated powers, the power to spend money is independent of the limitations which affect the
other powers of the Commonwealth and is not to be restricted by reference to the purposes for
which, otherwise, the Commonwealth is conceived to have been established. There has not been
wanting support for this view among those who have written about the Constitution, though I think
the more general opinion has been against it. But I cannot see that this case requires us to choose
between the two views. If it be conceded to the full that the power of appropriation authorizes the
expenditure of money on any purpose the Parliament may think fit without restriction as to subject
matter, it nevertheless appears to me to be a proposition that has little or no relevance to this case. It
is certainly not one that can support the Pharmaceutical Benefits Act as a whole. If it were true that
the Act was primarily an appropriation for expenditure and that it did not appear impossible to sever
the provisions which went beyond what is incidental to such an appropriation, it would be then
necessary to consider how much could be supported under s. 81 and how much of the rest could be
stripped from the enactment without changing its essential character. But the fact is that under the
Pharmaceutical Benefits Act appropriation of money is the consequence of the plan; the plan is not
consequential upon or incidental to the appropriation of money. There is only one matter that
appears to me to arise in this case for decision in respect of s. 81. It is the suggestion that it might be
read as if it were the power in the American Constitution authorizing the raising of revenue to
provide for the general welfare of the United States. The suggestion means to my mind that we
should read or write into the Australian provisions a conception foreign to them. Article I., s. 8, of
the Constitution of the United States confers upon Congress power "to lay and collect Taxes Duties
Imposts and Excises, to pay the Debts and provide for the common Defence and general welfare of
the United States." Upon this text there has been an historic controversy. The conclusions of the
Supreme Court which largely have set the controversy at rest, are embodied in the following
passages from the opinion of the Court in United States v. Butler[22]:--"It is not contended that this
provision grants power to regulate agricultural production upon the theory that such legislation
would promote the general welfare. The Government concedes that the phrase to provide for the
general welfare qualifies the power to lay and collect taxes. The view that the clause grants power to
provide for the general welfare, independently of the taxing power, has never been authoritatively
accepted. Mr. Justice Story points out that if it were adopted it is obvious that under color of the
generality of the words, to provide for the common defence and general welfare, the Government of
the United States is, in reality, a government of general and unlimited powers, notwithstanding the
subsequent enumeration of specific powers (Story, Commentaries on Constitution of United States,
5th ed., vol. 1, s. 907). The true construction undoubtedly is that the only thing granted is the power
to tax for the purpose of providing funds for payment of the nation's debts and making provision for
the general welfare"[23]. "While, therefore, the power to tax is not unlimited, its confines are set in
the clause which confers it, and not in those of s. 8 which bestow and define the legislative powers
of the Congress. It results that the power of Congress to authorize expenditure of public moneys for
public purposes is not limited by the direct grants of legislative power found in the
Constitution"[24].

In that opinion it was said: "We are not now required to ascertain the scope of the phrase general
welfare of the United States." But that conception was described in the following year in the opinion
of the Court in Helvering v. Davis[25]:--"Yet difficulties are left when the power is conceded. The
line must still be drawn between one welfare and another, between particular and general. Where
this shall be placed cannot be known through a formula in advance of the event. There is a middle
ground or certainly a penumbra in which discretion is at large. The discretion, however, is not
confided to the courts. The discretion belongs to Congress, unless the choice is clearly wrong, a
display of arbitrary power, not an exercise of judgment. This is now familiar law. ... Nor is the
concept of the general welfare static. Needs that were narrow or parochial a century ago may be
interwoven in our day with the well-being of the nation. What is critical or urgent changes with the
times."

We would not, in my opinion, be justified in reading the words "general welfare" or the conception
which they are understood to embody into our Constitution as an object of the legislative power to
appropriate money. To do so would be to amend the Constitution, not to interpret it. The words of
our Constitution are "purposes of the Commonwealth" and whether ultimately they are, or are not,
held to be consistent with a power of expenditure unrestrained in point of subject matter or purpose,
they cannot be regarded as doing the work which the words "general welfare" have been required to
do in the United States. That is all, I think, that need be decided in the present case about the power
of expenditure under the Commonwealth Constitution.

But it is perhaps as well that I should add that hitherto my own view has always been, on the one
hand, that s. 81 has little or no bearing upon the matter because it is a provision in common
constitutional form substituting for the usual words "public service" the word "purposes" of the
Commonwealth only because they are more appropriate in a Federal form of government, and, on
the other hand, that s. 83, in using the words "by law" limits the power of appropriation to what can
be done by the enactment of a valid law. In deciding what appropriation laws may validly be
enacted it would be necessary to remember what position a national government occupies and, as I
have already said, to take no narrow view, but the basal consideration would be found in the
distribution of powers and functions between the Commonwealth and the States. I have not yet seen
any reason to desert this opinion. But, I repeat, this case requires us to go no further than to
distinguish the carefully chosen words of our Constitution from the very different words of that of
the United States.

In my opinion the Pharmaceutical Benefits Act 1944 is ultra vires of the Commonwealth
Parliament.

I have stated my opinion upon the validity of the legislation first because I think that, upon the
authority of the decisions of this Court, we must decide that the suit is maintainable. Whether it is
maintainable is a question which must have great importance with respect to enactments that are
likely to escape challenge by individuals, and of this the statute now in question may be thought an
example. It involves an application of principle that is not plain or simple. We cannot allow the
validity of Acts of Parliament to be submitted to our decision as abstract questions. The Court
pronounces upon the validity of a law only when called upon to do so in determining a cause or
matter within the Court's jurisdiction. Speaking broadly, it must arise in a proceeding in which a
right or immunity is asserted or a wrong or threatened wrong is complained of. It is the traditional
duty of the Attorney-General to protect public rights and to complain of excesses of a power
bestowed by law and in our Federal system the result has been to give the Attorney-General of a
State a locus standi to sue for a declaration wherever his public is or may be affected by what he
says is an ultra vires act on the part of the Commonwealth or of another State.

This application to the Federal system of a doctrine developed in the English unitary system has
been worked out in this Court, but not without difficulty. The Commonwealth contends that the
present suit goes further than the precedents warrant. The contention is based upon the view that the
Pharmaceutical Benefits Act involves for the most part administrative action and the expenditure of
money and but little exertion of coercive power, that it does not tend to the prejudice of any rights
or immunities enjoyed as of common right, and, further, that the field upon which it enters is not
occupied by any actual legislation of the State of Victoria.

An examination of the decided cases has satisfied me that these considerations are not enough. It is
sufficient, I think, to say that the settled doctrine of this Court was accurately expressed by Gavan
Duffy C.J., Evatt and McTiernan JJ. in Attorney-General for Victoria v. The Commonwealth[26]
when they said: "In our opinion, it must now be taken as established that the Attorney-General of a
State of the Commonwealth has a sufficient title to invoke the provision of the Constitution for the
purpose of challenging the validity of Commonwealth legislation which extends to, and operates
within, the State whose interests he represents."

In my opinion the demurrer of the Commonwealth should be overruled.

McTiernan J.

In my opinion the Pharmaceutical Benefits Act 1944, except s. 8 (3), is a valid law of the
Commonwealth. The Act with the exception of s. 8 (3) is, I think, within the powers which are
vested in the Commonwealth Parliament by s. 81 and s. 51 (xxxix.) of the Constitution of the
Commonwealth.

I state my reasons as briefly as I can. The words "to be appropriated" in s. 81 imply a grant of power
to the Parliament to control the expenditure of the Consolidated Revenue Fund, subject to such
exceptions as the Constitution provides. The words "for the purposes of the Commonwealth" in the
section mark the only limits of the power of appropriation which the section confers upon the
Parliament.

The ordinary meaning of the word Commonwealth is a body of people united in a body politic
governed on democratic principles. The preamble to the Imperial Act establishing the
Commonwealth of Australia declares that "the people" of the States agreed "to unite in one
indissoluble Federal Commonwealth." The word Commonwealth here means the whole of the
people of Australia.

Section 51 of the Constitution provides that the Parliament shall, subject to the Constitution, have
power to make laws for the peace, order and good government of "the Commonwealth." This
section contemplates a state of affairs to be enjoyed by the people of Australia. The words "the
Commonwealth" in that context, s. 51, mean the people. The same meaning must I think be given to
the word "Commonwealth" in s. 81. It is for the purposes of the people united in the Australian
Federal Commonwealth that the power of appropriation is given to the Parliament.

The words "for the purposes of the Commonwealth" in s. 81 are general words and no limitation on
them is expressed. They are not convertible into such a phrase as "for purposes in respect of which
the Parliament is given the powers of legislation contained in s. 51 or any other section," or into
such a phrase as "for the purposes of the Constitution." The purposes of the Commonwealth are, I
think, such purposes as the Parliament determines. This view of the meaning of the words "the
purposes of the Commonwealth" is consistent with the union of the people of the States in a
Commonwealth.

Any purpose for which the elected representatives of the people of the Commonwealth determine to
appropriate the revenue is a purpose of the Commonwealth. If it were otherwise, judicial scrutiny of
a purpose for which Parliament appropriated revenue could take place in order to determine whether
the purpose was lawful or not. The Constitution puts the power of the purse in the hands of
Parliament, not in the hands of the Courts. I think that the object of s. 81 is to put this power in the
hands of Parliament.

An appropriation is not a departure from the Constitution merely for the reason that it is made for a
purpose not envisaged by the makers of the Constitution. As the Constitution is an instrument of
government it has the quality of adaptability to new needs and conditions. The purposes of the
Commonwealth are not fixed or immutable. They expand and change with the growth and
development of the nation. As the Constitution is an instrument of government it should not be
construed as if it were merely an Act of Parliament or a contract. When Parliament has appropriated
revenue for any purpose the Court could not decide the question whether it was a purpose of the
Commonwealth without entering into a consideration of matters of policy which are peculiarly and
exclusively within the legislative sphere.

I think therefore that the Pharmaceutical Benefits Act cannot be impugned on the ground that the
provision of pharmaceutical benefits is not a purpose of the Commonwealth for which the
Parliament may appropriate the revenue.

The tests which are within the judicial province and are to be applied to the provisions of the Act in
order to determine their validity are whether they define or specify or limit the purpose of the
appropriation, or are incidental to the execution of the power of appropriation vested in the
Parliament.

It is part of the statement of the purpose of the present appropriation to prescribe the pharmaceutical
benefits upon which the revenue appropriated is to be expended and their standard. It is also part of
the statement of the purpose to prescribe the persons who are entitled to be supplied with the
pharmaceutical benefits upon which the appropriated revenue is to be expended, and the extent of
the medical need which entitles a person to such benefits. Section 9 (2), for example, provides that a
person who has received any pharmaceutical benefit under the Act shall not be entitled to receive it
again without a direction from the medical practitioner.

The purpose of the appropriation is not the supply of pharmaceutical benefits in the air. I think that
all the provisions of the Act with the exception of s. 8 (3) can be justified either because they define,
specify or limit the purpose to which the revenue is appropriated or because they are merely
machinery for the expenditure of the money appropriated or provide safeguards for its due
expenditure on the purpose of the appropriation, and in the latter case are accordingly incidental to
the execution of the power of appropriation.

Section 8 (3) purports to give a right to a person supplying a pharmaceutical benefit in accordance
with the Act to make such charges, if any, as may be prescribed. This provision is not a specification
or limitation of the purpose of the appropriation nor is it incidental to the expenditure of the
appropriated revenue.

The Constitution vests legislative powers in the Parliament of the Commonwealth and saves the
legislative powers of the States which are not exclusively vested in the Parliament of the
Commonwealth or withdrawn from the States. It is to be noticed that what on the one hand are
granted to the Commonwealth, and on the other preserved for the States, are not subjects for
legislation, but legislative powers. A provision of a Federal Act is not invalid merely because it is of
the kind which it would be within the State legislative power preserved by the Constitution to
include in an Act relating, for example, to health. A provision of a Federal Act, for example, with
respect to inter-State trade and commerce, would not be ultra vires merely because the provision is
of the kind which a State Parliament could validly enact under the legislative powers preserved to
the State, for example, as part of a health Act. I think, therefore, that the test to be applied to any
provision of the Federal Act, now in question, in order to determine whether it is invalid, is not
whether such provision could be validly enacted under the legislative powers of the States. The test
is whether the provision may properly be part of a Federal Act appropriating Commonwealth
revenue. The provision may do so if it defines, specifies or limits the purpose of the appropriation or
is incidental to the expenditure of the appropriated revenue.

For these reasons I arrive at the conclusion that the whole of the Act except s. 8 (3) is valid; this
sub-section is severable.

In the view which I take of the Act it is hardly necessary for me to deal fully with the question
whether the Attorney-General of the State of Victoria is competent to sue for the relief claimed. The
action is brought on the relation of persons who are joined as relators, but it is none the less the
Attorney-General's action (Attorney-General v. Wimbledon House Estate Co. Ltd.[27]). The right of
the Attorney-General of the State to sue is supported by the cases in this Court cited in argument. I
reserve my opinion on the question whether the principles applied in those cases are decisive in
favour of the locus standi of a State Attorney-General to claim a declaration that any Act passed
under s. 81 of the Constitution is invalid. Granting that the present action lies at the suit of the
Attorney-General of a State I think that the declaration which should be made is that s. 8 (3) only is
invalid; subject to that reservation I should allow the demurrer and dismiss the action.

Williams J.

This is a demurrer to an action brought by the Attorney-General for the State of Victoria ex
relatione against the Commonwealth of Australia, the Director-General of Health for the
Commonwealth of Australia, and the Minister of State for Health of the Commonwealth of
Australia claiming a declaration that the Pharmaceutical Benefits Act 1944 is invalid and void, and
an injunction restraining the two last-named defendants from carrying into execution any of the
provisions of the Act or expending any of the moneys of the Commonwealth in pursuance of the
provisions or for the purposes of the Act.

Two questions arise on the demurrer: (1) Whether the Court has jurisdiction to entertain the action;
and (2) Whether the Pharmaceutical Benefits Act is a valid exercise of the legislative powers of the
Parliament of the Commonwealth.

The plaintiff contends that there is jurisdiction to entertain the action on a number of grounds. Of
these grounds, I need only mention one, namely that the Pharmaceutical Benefits Act is not
authorized by the Constitution, and is an attempt by the Parliament of the Commonwealth to invade
a legislative field upon which it has no authority to intrude. The legislative powers conferred upon
the Commonwealth Parliament by the Constitution are limited to the specific powers therein
enumerated. In so far as they extend they are plenary in the fullest sense of the word, and are
binding upon Australians because they are citizens of the Commonwealth. But Australians are also
citizens of a State. Beyond the legislative field which the Parliament of the Commonwealth is
entitled to occupy in the exercise of these powers, apart from Acts of the Imperial Parliament, the
Parliaments of the States, and those Parliaments alone, have the power to bind the citizens of a State
by legislation. The citizens of each State have, therefore, a collective public right to complain if the
Parliament of the Commonwealth exceeds its legislative powers and purports to bind them by laws
which it has no authority to make. In popular language a cause of action is the act on the part of the
defendant which gives the plaintiff his cause of complaint (Jackson v. Spittall[28]).

If legislation of the Parliament of the Commonwealth is of such a nature that it purports to interfere
with the private rights of individuals as such, or such individuals suffer special damage peculiar to
themselves, such individuals can sue as individuals, but if the relief or advantage claimed is of such
a nature that it does not specially affect them as individuals but only as members of the general
public, then the Attorney-General is a necessary party to the action (London Passenger Transport
Board v. Moscrop[29]). In the present case the only plaintiff is the Attorney-General for the State of
Victoria. There are no individual plaintiffs. The right alleged to be infringed is the public right of
the citizens of the State of Victoria not to be subjected to legislation which the Parliament of the
Commonwealth has no authority to enact. As Isaacs J. pointed out in Attorney-General for N.S.W. v.
Brewery Employés Union of N.S.W. (The Union Label Case)[30], "the Attorney-General for a State
in such case does not depend upon the infringement of rights possessed by individuals as
Australians under a Federal statute, but protects on behalf of the Crown those rights and functions
with which the King, guided solely by his State representatives and advisers, is invested in respect
of the State."

But counsel for the defendants, after pointing out that the Parliament of the State of Victoria has not
yet legislated in the field alleged to have been invaded by the Pharmaceutical Benefits Act,
contended that, as there was no existing conflict between State and Commonwealth legislation, the
declaration claimed involved a mere abstract question of law, so that there was no "matter" within
the meaning of s. 75 of the Constitution. It was, of course, held in In re Judiciary Act[31] that there
is no "matter" within the meaning of this section unless there is some immediate right, duty, or
liability to be established by the determination of the Court. But, as I have said in two recent cases,
Whitney v. Vegetable Seeds Committee[32] and French v. McCarthy[33], I do not understand this
statement to mean that the jurisdiction of this Court under order IV. of the Rules of Court to make
declarations in cases where it has original jurisdiction is less than the corresponding jurisdiction of
the English Courts under order XXV., rule 5. In those cases the opinion was expressed that the
words in order IV. "in an action properly brought" mean in an action in which this Court has
original jurisdiction.

The present action, in my opinion, raises more than abstract questions. The Act has not yet been
proclaimed, but we were informed by counsel for the defendants that it will be proclaimed at the
beginning of next year, and that in the meantime the necessary preliminary steps are being taken so
that it may then be brought into effective operation. The question will therefore arise in the
immediate future whether the public in each of the States are entitled to the benefits and subject to
the obligations imposed by the Act. The cause of action relied upon is not founded upon any
conflict between State and Federal legislation, but upon the right, in some instances of the
individual, and in other instances of the public or a section of the public, to restrain a public body
clothed with statutory powers exceeding those powers. The cause of action was discussed and
explained by O'Connor J. in the Union Label Case[34], and by my brothers Rich and Dixon in
Tasmania v. Victoria[35]. In England no question can arise as to the validity or invalidity of an Act
of the Imperial Parliament, but such questions can arise with respect to regulations or executive acts
purported to be made or done under the authority of Imperial Acts, and in England a claim for a
declaration that such regulations or executive acts are beyond power would clearly constitute a
cause of action. Instances where individuals who could claim some special interest in themselves
have litigated such causes of action are illustrated by such cases as Dyson v. Attorney-General[36];
Burghes v. Attorney-General[37]; Wigg v. Attorney-General for the Irish Free State[38]; Yoxford and
Darsham Farmers' Association Ltd. v. Llewellin[39]; while instances where it would be necessary to
join the Attorney-General are discussed by Viscount Maugham in Moscrop's Case[40]. As the Chief
Justice has said in Toowoomba Foundry Pty. Ltd. v. The Commonwealth[41], "it is now ... too late to
contend that a person who is, or in the immediate future probably will be, affected in his person or
property by Commonwealth legislation alleged to be unconstitutional has not a cause of action in
this Court for a declaration that the legislation is invalid." The rights and liabilities created in favour
of and imposed upon the public of the State of Victoria by the Pharmaceutical Benefits Act are just
as immediate as the impact upon individuals of the legislation in question in that case and the other
cases cited by the Chief Justice. The only difference is that in those cases the plaintiffs were seeking
to enforce individual rights, whereas in the present case the plaintiff is seeking to enforce a right of
the public generally.

For these reasons I am of the opinion that there is jurisdiction to entertain the action.

I shall now proceed to consider the second question. The Pharmaceutical Benefits Act has already
been set out in considerable detail in the judgments of the Chief Justice and my brother Dixon, so
that I shall only refer briefly to its main provisions. Its purpose, to be gathered from its title and
contents, is to make the pharmaceutical benefits contained in the Commonwealth Pharmaceutical
Formulary available free of charge to every person ordinarily resident in the Commonwealth. In
order to obtain these benefits a person must be personally examined by a qualified medical
practitioner, who, if satisfied that the pharmaceutical benefit is necessary for his treatment, must
write and sign a prescription, which must be in the prescribed form and written on a form supplied
by the Commonwealth. The person then takes the prescription to an approved pharmaceutical
chemist, who supplies the prescribed pharmaceutical benefit free of charge and is paid by the
Commonwealth at the prescribed rate. The Act contemplates that qualified medical practitioners
will make the necessary personal examinations, and that pharmaceutical chemists will apply for
approval. But it also authorizes the Minister to make special arrangements in the case of isolated
areas, and to make arrangements with medical practitioners so that their services will be available
without charge to members of the public for the purpose of furnishing prescriptions and orders for
the purposes of the Act. It creates a number of criminal offences for failure to comply with its
provisions, and empowers authorized persons to enter the premises of approved pharmaceutical
chemists, and, inter alia, take samples of drugs &c. which may be supplied as pharmaceutical
benefits, and examine any person employed in any such premises with respect to any matter under
the Act. It also authorizes the Governor-General to make regulations not inconsistent with the Act,
prescribing all matters which by the Act are required or permitted to be prescribed, and which are
necessary or convenient to be prescribed for carrying out or giving effect to the Act, and in certain
particulars, including the standards of composition or purity of pharmaceutical benefits subject to
which payment in respect of the supply thereof will be made.

There is nothing in the Act which legally requires a medical practitioner to examine patients and
give prescriptions or which prevents a medical practitioner writing a prescription not in the
prescribed form, after or without a personal examination, for a medicine included in the
Commonwealth Formulary and the patient having that prescription made up at his own expense, or
which compels a pharmaceutical chemist to apply for approval, although the practical compulsion to
implement the Act, particularly in the case of pharmaceutical chemists, would be great. But I am
unable to see how the constitutional validity of the Act can depend upon the question whether or not
the pharmaceutical benefits included in the Commonwealth Formulary can only be obtained in
accordance with its provisions.

Section 17 of the Act provides that payments in respect of pharmaceutical benefits shall be made out
of the account established under the National Welfare Fund Act 1943 and known as the National
Welfare Fund. The latter Act provides that there shall be paid out of the Consolidated Revenue
Fund, which is thereby appropriated accordingly, for the purposes of the National Welfare Fund in
each financial year the sum of £30,000,000, or a sum equal to one quarter of the amount received in
that financial year as income tax from persons other than companies, whichever is the less; and that
moneys standing to the credit of the National Welfare Fund shall be applied in making such
payments as are directed by any law of the Commonwealth to be made from that fund, in relation to
health services, unemployment or sickness benefits, family allowances, or other welfare or social
services. The purpose of the Pharmaceutical Benefits Act is therefore to authorize the expenditure of
part of the revenues of the Commonwealth upon the provision of free medicine for persons
ordinarily resident in the Commonwealth. But it does not merely authorize the appropriation of
money for this purpose. It contains provisions affecting the relationship, contractual or under the
laws of the States, of medical practitioners and patients, of customers and chemists, and many other
provisions which can only be described as legislation upon the subject matter of public health.
There is no express power in the Constitution for the Parliament of the Commonwealth to legislate
upon this subject matter except to make laws with respect to quarantine and as incidental to the
execution of any powers vested in the Commonwealth by the Constitution. And no attempt was
made on behalf of the defendants to uphold the validity of the Act under any provisions of the
Constitution except those contained in s. 81. That section provides that: "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." It was contended that this section
contains an independent grant of legislative power, and that upon its true meaning it is for the
Parliament of the Commonwealth and not for the Court to decide upon what purposes the
Commonwealth can expend its moneys. Reference was made to Article I., s. 8, of the Constitution
of the United States of America which authorizes Congress "to lay and collect Taxes Duties Imposts
and Excises, to pay the Debts and provide for the common Defence and general welfare of the
United States."

At the date of the Commonwealth of Australia Constitution Act opinion was still divided in the
United States of America whether this power to tax and expend moneys, whilst not unlimited, was
confined only by the clause which bestowed it, or by s. 8, which bestowed and defined the
legislative powers of Congress. Recently it has been held that the power of Congress to authorize
the expenditure of public moneys for public purposes is not limited by the direct grants of
legislative power found in the Constitution, and that, while the line must still be drawn between one
welfare and another, between particular and general, the discretion must be left to Congress unless
the choice is clearly wrong (United States v. Butler[42]; Helvering v. Davis[43]). But the relevant
provisions in the Constitution of the United States of America are different in structure and wording
to those in the Constitution of the Commonwealth. In the Constitution of the Commonwealth the
power to tax is a separate power contained in Chapter I. headed "the Parliament", whereas the power
to appropriate is contained in Chapter IV. headed "Finance and Trade." One of the main purposes of
s. 81 is to provide for the formation of the Consolidated Revenue Fund. It is s. 83 which provides
that no money shall be withdrawn from the Treasury of the Commonwealth except under
appropriation made by law. Under s. 81 money can be so appropriated by law only for the purposes
of the Commonwealth and in the manner and subject to the charges and liabilities imposed by the
Constitution. The charges and liabilities so imposed are those contained in s. 82. The manner of
appropriation appears to refer to ss. 53, 54 and 56. The important words are, therefore, those
contained in the phrase "for the purposes of the Commonwealth." They are more specific than the
words "the general welfare of the United States." The Act to constitute the Commonwealth of
Australia provides that the Commonwealth shall mean the Commonwealth of Australia as
established under this Act. It is in this sense that the words "the Commonwealth" are, in my opinion,
used in the phrase. The phrase must have been inserted to have some effect, and if it is to have any
effect it must place some constitutional limitation upon the purposes for which the Commonwealth
Parliament can pass an appropriation Act. The object of the Constitution was to superimpose on the
existing body politics consisting of the States a wider overriding body politic for certain specific
purposes. It was for these particular purposes and these alone that the body politics consisting of the
States agreed to create the body politic known as the Commonwealth of Australia. These purposes
must all be found within the four corners of the Constitution.

The Parliament of the Commonwealth is empowered by s. 51 (xxiii.) to make laws with respect to
invalid and old age pensions, and it can therefore appropriate moneys out of the Consolidated
Revenue Fund for this purpose, but it has no general power to legislate for social services. This
general power is left to the States. The Commonwealth only has power under s. 96 to make grants to
the States for such general purposes. The Pharmaceutical Benefits Act cannot, therefore, be
supported under s. 81 because it purports to appropriate money for a purpose which is not a purpose
of the Commonwealth. This objection goes to the Act as a whole and to all its parts, so that no parts
are severable from others under s. 15A of the Acts Interpretation Act 1903-1941.
For these reasons I would overrule the demurrer.
Demurrer overruled.
Solicitors for the plaintiff, a'Beckett, Chomley and Henderson.
Solicitor for the defendants, H. F. E. Whitlam, Crown Solicitor for the Commonwealth.
[1] [1908] HCA 68; (1908) 7 C.L.R. 179.
[2] [1908] HCA 94; (1908) 6 C.L.R. 469, at pp. 498, 520, 552, 553, 557, 558.
[3] [1920] HCA 79; (1920) 29 C.L.R. 1.
[4] [1935] HCA 4; (1935) 52 C.L.R. 157.
[5] [1935] HCA 31; (1935) 52 C.L.R. 533.
[6] (1935) 52 C.L.R., at p. 556.
[7] [1923] USSC 152; (1923) 262 U.S. 447 [67 Law. Ed. 1078].
[8] [1908] HCA 68; (1908) 7 C.L.R. 179.
[9] [1922] HCA 62; (1922) 31 C.L.R. 421, at p. 441.
[10] [1936] USSC 11; (1936) 297 U.S. 1 [80 Law. Ed. 477].
[11] [1937] USSC 118; (1937) 301 U.S. 619 [81 Law. Ed. 1307].
[12] [1937] USSC 109; (1937) 301 U.S. 548 [81 Law. Ed. 1279].
[13] [1920] HCA 54; (1920) 28 C.L.R. 129.
[14] [1935] HCA 4; (1935) 52 C.L.R. 157, at p. 171.
[15] [1935] HCA 31; (1935) 52 C.L.R. 533, at pp. 560, 561.
[16] [1936] USSC 11; (1936) 297 U.S. 1 [80 Law. Ed. 477].
[17] [1937] USSC 118; (1937) 301 U.S. 619 [81 Law. Ed. 1307].
[18] [1923] USSC 152; (1923) 262 U.S. 447 [67 Law. Ed. 1078].
[19] [1908] HCA 94; (1908) 6 C.L.R. 469.
[20] [1935] HCA 4; (1935) 52 C.L.R. 157.
[21] [1935] HCA 31; (1934) 52 C.L.R. 533.
[22] [1936] USSC 11; (1936) 297 U.S. 1, at pp. 64, 66 [80 Law. Ed. 477, at pp. 487, 488].
[23] [1936] USSC 11; (1936) 297 U.S. 1, at p. 64 [80 Law. Ed. 477, at p. 487].
[24] [1936] USSC 11; (1936) 297 U.S. 1, at p. 66 [80 Law. Ed. 477, at p. 488].
[25] [1937] USSC 118; (1937) 301 U.S. 619, at p. 640 [81 Law. Ed. 1307, at p. 1315].
[26] [1935] HCA 31; (1935) 52 C.L.R. 533, at p. 556.
[27] (1904) 2 Ch. 34, at p. 39.
[28] (1870) L.R. 5 C.P. 542, at p. 552.
[29] (1942) A.C. 332, at pp. 345, 351.
[30] [1908] HCA 94; (1908) 6 C.L.R. 469, at pp. 557, 558.
[31] [1921] HCA 20; (1921) 29 C.L.R. 257, at pp. 265-267.
[32] Unreported.
[33] Unreported.
[34] [1908] HCA 94; (1908) 6 C.L.R. 469, at pp. 550-553.
[35] [1935] HCA 4; (1935) 52 C.L.R. 157, at pp. 171, 186-188.
[36] (1911) 1 K.B. 410; (1912) 1 Ch. 158.
[37] (1912) 1 Ch. 173.
[38] (1927) A.C. 674.
[39] (1945) 173 L.T. 103.
[40] (1942) A.C. 332.
[41] [1945] HCA 15; (1945) A.L.R. 282, at p. 289.
[42] [1936] USSC 11; (1936) 297 U.S. 1, at pp. 66, 67 [80 Law. Ed. 477, at pp. 488, 489].
[43] [1937] USSC 118; (1937) 301 U.S. 619, at pp. 640, 641 [81 Law. Ed. 1307, at pp. 1314, 1315].
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