Roy Morgan Research Pty Ltd v Commissioner of Taxation
Document type: Decision Impact Statement
Venue: High Court (M177 of 2010)
Judgment date: 28 September 2011
Date published: 1 November 2011
Decision outcome: Favourable

Summary of decision:
Outlines the ATO's response to the case about whether superannuation guarantee charge ("SGC"), is a tax supported by s 51(ii) of the Commonwealth Constitution.

Overview of facts:
The taxpayer appealed to the High Court against the decision of the Full Court of the Federal Court which had upheld the constitutional validity of the Superannuation Guarantee Charge Act 1992 ("the Charge Act") and the Superannuation Guarantee ( Administration ) Act 1992 ("the Administration Act") . | Issues decided by the court | The appeal to the High Court concerned the power of the Parliament to make laws with respect to taxation under s 51(ii) of the Constitution. The taxpayer challenged the validity of the provisions in the Charge Act and the Administration Act dealing with the SGC. The taxpayer argued that the SGC was not a "tax" because it was not imposed for "public purposes". This was said to be because the SGC conferred "a private and direct benefit" on the relevant employees. It followed, the taxpayer argued, that neither the Charge Act nor the Administration Act was a law with respect to taxation within the meaning of s 51(ii), and that the legislation establishing the SGC and providing for its administration was invalid. | The High Court held unanimously that the SGC was a tax, and that the taxpayer's constitutional challenge to the Administration Act and the Charge Act failed. The receipt of the proceeds of the SGC into the Consolidated Revenue Fund ("CRF") established that the SGC was imposed for "public purposes". The Court held that where other necessary constitutional criteria of a tax are met, as they were in this case, the receipt of funds into the CRF conclusively established the character of the SGC as a valid tax.

Issues decided:
The appeal to the High Court concerned the power of the Parliament to make laws with respect to taxation under s 51(ii) of the Constitution. The taxpayer challenged the validity of the provisions in the Charge Act and the Administration Act dealing with the SGC. The taxpayer argued that the SGC was not a "tax" because it was not imposed for "public purposes". This was said to be because the SGC conferred "a private and direct benefit" on the relevant employees. It followed, the taxpayer argued, that neither the Charge Act nor the Administration Act was a law with respect to taxation within the meaning of s 51(ii), and that the legislation establishing the SGC and providing for its administration was invalid. The High Court held unanimously that the SGC was a tax, and that the taxpayer's constitutional challenge to the Administration Act and the Charge Act failed. The receipt of the proceeds of the SGC into the Consolidated Revenue Fund ("CRF") established that the SGC was imposed for "public purposes". The Court held that where other necessary constitutional criteria of a tax are met, as they were in this case, the receipt of funds into the CRF conclusively established the character of the SGC as a valid tax.

ATO view of decision:
The High Court's decision accords with the ATO view.

Administrative treatment:
Implications for ATO precedential documents | None | Implications for Law Administration Practice Statements | None

Legislative references: Constitution 51(ii) Superannuation Guarantee (Administration) Act 1992 16 17 Superannuation Guarantee Charge Act 1992 5 6
Case references: Matthews v Chicory Marketing Board (Vict) [1938] HCA 38 60 CLR 263 Australian Tape Manufacturers Association Ltd v The Commonwealth [1993] HCA 10 176 CLR 480 Northern Suburbs General Cemetery Reserve Trust v The Commonwealth [1993] HCA 12 176 CLR 555 25 ATR 1 93 ATC 4118 Luton v Lessels 210 CLR 333 2002 ATC 4311 49 ATR 471 [2002] HCA 13
Subject references: Constitutional law (Cth) s 51(ii) Superannuation guarantee charge Whether imposed for 'public purposes' 'private and direct benefit'