The Full Federal Court has partly allowed appeals by commissioned officers of the Western Australian police force against superannuation contributions tax assessments.

The question in the appeals was whether the Commonwealth can validly impose a superannuation surcharge tax upon commissioned officers of the Western Australian police force.

The Acts imposing the tax have already been held invalid in their application to:

  • State Supreme Court judges (Austin v Commonwealth [2003] HCA 3; (2003) 215 CLR 185); and
  • State parliamentarians (Clarke v FCT [2009] HCA 33; (2009) 240 CLR 272);

on the basis that they placed a particular disability or burden upon the operations or activities of the State so as to be beyond the legislative power of the Commonwealth.

The Austin and Clarke cases hold that the Commonwealth may not impose a discriminatory surcharge tax upon high level State officials.

The Full Federal Court said the question before it was whether that principle covers commissioned police officers.

The appellants are, or were, commissioned police officers. They submitted that Austin and Clarke mean that the same tax cannot be imposed on them for 2 reasons. These are:

  • first, that policing is a core function of State governments; and
  • secondly, that commissioned police officers are at a sufficiently senior level within the State government to be immune from regulation by the Commonwealth of the terms and conditions of their employment.

The Full Federal Court said that whilst the Commissioner of Taxation accepted that the Commissioner of Police himself could not be validly levied with the surcharge tax, he did not accept this in the case of the other commissioned officers. He therefore rejected the objections, which they had lodged to the assessments he had issued.

The appellants then appealed to the Federal Court at first instance where the trial judge dismissed their appeals – Albrecht & Ors v FCT [2013] FCA 1248. They then appealed to the Full Federal Court.

After reviewing the matter, the Full Federal Court held that [some of] the appeals should be allowed and the appeals to the Court below allowed, to the extent that the objection decisions considered that some of the appellants were liable to pay the tax whilst they held the rank of Deputy Commissioner of Police (Operations), Deputy Commissioner of Police (Specialist Services) or Assistant Commissioner. The appeals should be otherwise dismissed, the Court said.

(Albrecht & Ors v FCT [2014] FCAFC 176, Full Federal Court, Perram, Robertson and Griffiths JJ, 19 December 2014.)

[LTN 1, 5/1/15]