The Full Federal Court has upheld the constitutional validity of superannuation contributions surcharge tax assessments under the Superannuation Contributions Tax (Assessment and Collection) Act 1997 in respect of the Parliamentary Contributory Superannuation Fund for members of the Victorian Parliament under the Parliamentary Salaries and Superannuation Act 1968 (Vic).
The taxpayer claimed that the superannuation contributions surcharge (tax) assessments issued under the surcharge legislation were beyond the legislative competence of the Commonwealth because it curtailed or interfered with the capacity of the State of Victoria to function as a government. Essentially, the taxpayer sought to rely on the application of the judgments of the High Court in Austin v The Commonwealth (2003) 215 CLR 185 and Clarke v FCT (2009) 240 CLR 272.
In unanimously dismissing the taxpayer’s appeal, the Full Court distinguished the situation in Austin and Clarke and found that there was nothing discriminatory in the relevant surcharge legislation which “restricts or burdens one or more of the States in the exercise of their constitutional powers” under the Melbourne Corporation doctrine.
The Full Court rejected the taxpayer’s attempt to distinguish its circumstances from The State of Victoria v The Commonwealth (1971) 122 CLR 353 (The Pay-Roll Tax Case), where the High Court held that the imposition of pay-roll tax on a State did not interfere with State functions. If one accepts that there is no relevant distinction between a pay-roll tax, FBT and a superannuation surcharge tax, then the Pay-Roll Tax Case appears to require the conclusion that the relevant surcharge legislation is valid, the Full Court said.
The Full Court noted that the surcharge legislation imposed a general tax on the State of Victoria and there was no special legislation singling out high office-holders of the State (unlike the legislation in Austin and Clarke). So viewed, the Full Court said the burden is to be seen as neither more nor less than the exposure of the State to Commonwealth taxation.
(Parliamentary Trustee of the Parliamentary Contributory Superannuation Fund v FCT [2013] FCAFC 127, Full Federal Court, Kenny, Perram & Robertson JJ, 14 November 2013.)
[FJM Note: This seems to be a case about a contributory superannuation regime, so that the surcharge legislation was that which applied to everyone – in contrast to the special surcharge legislation applying to non-contributory super in the cases of Austin and Clarke.]
[LTN 226, 21/11/13]