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In Williams v Commonwealth [No 2] the High Court unanimously rejected the contention that Commonwealth funding for a national program providing support for chaplains in state schools was authorised by the Financial Management and Accountability Act 1997 (Cth). The Court held that this statute was not supported by a head of Commonwealth legislative power in the Constitution insofar as the chaplaincy program was concerned. In the course of the decision, the Court affirmed the broader principle established in recent cases that the Commonwealth's executive power to contract and spend is not unlimited. In this case note, we examine the two separate judgments in Williams v Commonwealth [No 2] in light of the reasoning in earlier cases, and go on to consider the implications of the decision for other Commonwealth spending programs.
I INTRODUCTION
Williams v Commonwealth [No 2] ('Williams [No 2]')1 is the most recent decision in a line of High Court authority2 that has fundamentally reshaped understandings of federal executive power in Australia.3 Prior to this line of cases, it was arguable that the scope of the Commonwealth's capacities to spend money and enter into contracts was analogous to that of a natural person, and so was effectively unlimited. Alternatively, a more restrained, but still broad conception of these capacities might have suggested that they were limited only in breadth by the contours of the federal legislative powers in ss 51, 52 and 122 of the Constitution and in depth by principles derived from the concepts of responsible government, separation of powers, and rule of law.4 It was also arguable that no further legislative authority was necessary for the expenditure of money beyond an ordinary appropriation under s 81 of the Constitution.5
The High Court decisions in Pape v Commissioner of Taxation ('Pape')6 and Williams v Commonwealth ('Williams [No 1]')7 turned these conceptions of executive power on their head. It is now accepted that Commonwealth executive power to enter into contracts or spend public money is in most cases limited to that for which it has authority positively conferred on it by statute.8 The exceptions arise when Commonwealth expenditure can be supported by some other recognised aspect of executive power, such as the 'nationhood power',9 the power to expend moneys in the...