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§ 383. “Any Grant of or Agreement for any such Bounty.”

The object of this provision is to protect existing obligations. Though, on the imposition of uniform duties, State bounties, generally speaking, are to end immediately, yet existing contracts, and grants already made, are to hold good. This question was first discussed at the Adelaide session of the Convention, when Sir Geo. Turner expressed some anxiety as to “contracts already in existence, or which may be in existence before this Act comes into force, or before the uniform duties of customs come into operation.” (Conv. Deb., Adel., p. 838.) The provision as it now stands was framed by the Finance Committee of the Convention at Melbourne. (See Historical Note.)

Although the general aim of the “bounty” clauses of the Constitution is clear enough, their exact construction is a matter of some difficulty. To discuss the meaning of this provision as to “grants of and agreements for” bounties, it will be necessary to recapitulate the provisions of the Constitution which refer to bounties.




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(1.) At the establishment of the Commonwealth, the Federal Parliament has power to make laws with respect to “bounties on the production or export of goods, but so that such bounties shall be uniform throughout the Commonwealth.” (Sec. 51—iii.) At the same moment, however, the control of the payment of bounties passes to the Executive Government of the Commonwealth. (Sec. 86.)

(2.) On the imposition of uniform duties, the power of the Parliament to grant bounties on the production or export of goods becomes exclusive. Thereupon all laws of the States offering bounties on the production or export of goods shall cease to have effect; but any grant of or agreement for any such bounty lawfully made by or under the authority of the Government of any State shall be taken to be good if made before 30th June, 1898, and not otherwise. (Sec. 90.)

(3.) Nothing in this Constitution prohibits a State from granting bounties on mining for metals, or from granting any bounty with the consent of both Houses of the Federal Parliament. (Sec. 91.)

Before the imposition of uniform duties of customs, therefore, the power of the Federal Parliament to grant federal bounties is accompanied by a power of the State Parliaments to grant State bounties; but though there is thus, in a sense, a concurrent legislative power, the executive control of the payment of bounties passes to the Federal Government. (See Note, § 367, supra.) On the imposition of uniform duties, the power of the State Parliaments to grant bounties is excluded, and State laws offering bounties are annulled; but certain “grants of or agreements for” bounties are to be taken to be good. And, lastly, an exception is made, by sec. 91, to both the exclusiveness of the federal power and the annulment of State laws. What, then, are “grants of and agreements for bounties,” and how does the Constitution affect them?

AGREEMENT.—The phrase “agreement for any such bounty lawfully made by or under the authority of the Government of any State” clearly means a binding contract actually entered into between the Government and a producer or exporter. No mere political promise, or announcement of policy on the one hand, or public expectation on the other hand, can constitute an agreement; the word can only mean a definite and binding legal agreement. The word “lawfully” seems only inserted to prevent the section being construed to validate any agreements which, apart altogether from this section, might be invalid.

GRANT.—The words “grant of” are not so easy to construe. They must, apparently—according to strict grammar—be read as “any grant of any such bounty lawfully made by or under the authority of the Government of any State.” The grant referred to cannot be the actual payment by the Executive Government of the State to the producer; because that would mean that such payments already made between 30th June, 1898, and the imposition of uniform duties of customs would, upon the latter event, become unlawfully made. It apparently means the appropriation of money to the purpose of the bounty—the actual setting aside of money, under Parliamentary authority, to that purpose.

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