any cattle referred to in the Act, namely, fat cattle or cattle available for export in Queensland, except in accordance with the Act. The Act may, and apparently does, incidentally prevent inter-state trade in cattle to some extent, but that interference is incidental, and is caused by an Act the States can lawfully pass under the powers reserved to the States by section 107 of the Constitution, without contravening section 92." Per POWERS, J. in Duncan v. The State of Queensland, 22 C.L.R., at pp. 642-652.

Payment to States for five years after uniform Tariffs.

93. During the first five years after the imposition of uniform duties of customs, and thereafter until Parliament otherwise 161 provides

(i.) The duties of customs chargeable on goods imported 162 into a State and afterwards passing into another State for consumption, and the duties of excise paid on goods produced or manufactured in a State and afterwards passing into another State for consumption, shall be taken to have been collected not in the former but in the latter State:

(ii.) Subject to the last subsection, the Commonwealth shall credit 163 revenue, debit expenditure, and pay balances to the several States as prescribed for the period preceding the imposition of uniform duties of customs.

§ 161. "UNTIL PARLIAMENT OTHERWISE PROVIDES."

LEGISLATION.

SURPLUS REVENUE ACT 1908.

This Act repealed the provision made by section 93 of the Constitution in relation to the crediting of revenue, the debiting of expenditure, and the payment of balances to the several States. The Act was proclaimed to commence on 13th June 1908; after that date and until the framing of the Surplus Revenue Act 1910,

the method of crediting and debiting was as follows:-The Commonwealth had to credit to each State-(a) the revenue (other than new revenue) collected therein by the Commonwealth; and (b) the proportion of the State, according to the number of its people, in the new revenue of the Commonwealth.

The Commonwealth, it was provided, should debit to each State (a) the expenditure of the Commonwealth incurred solely for the maintenance or continuance, as at the time of transfer of any department transferred from the State to the Commonwealth and (b) the proportion of the State, according to the number of its people, in the other expenditure of the Commonwealth. The Commonwealth should in each month ascertain the balance of revenue over expenditure, and pay that balance to the State as surplus revenue.

New revenue was defined to mean revenue-(I.) received by the department of External Affairs, the Attorney-General's Department, the Department of Home Affairs, and the Department of the Treasury. (II.) received by the Department of Trade and Customs other than duties of customs and excise and revenue arising out of the administration of the laws relating to customs and excise, or out of the administration of State Acts: Provided that any items of revenue which, by reason of their relation to “transferred expenditure, ought not, in the opinion of the Treasurer, to be credited as new revenue, should not be deemed to be new revenue: Provided further that any items of revenue which, by reason of their relation to "other" expenditure, or by reason of their nature, ought, in the opinion of the Treasurer, to be credited as new revenue, shall be deemed to be new revenue.

All duties of customs paid on goods imported into a State and afterwards passing into another State for consumption, and all duties of excise paid on goods produced or manufactured in a State and afterwards passing into another State for consumption should be taken to have been collected not in the former but in the latter State. All revenue collected by the Commonwealth in one State, but properly appertaining not to that State but to another State, should be taken to have been collected not in the former but in the latter State.

A most important section of the Act was as follows: -- All payments to trust accounts, established under the Audit Acts

1901-1906, of moneys appropriated by law for any purpose of the Commonwealth "shall be deemed to be expenditure. Where any trust account had been established under the Audit Acts 19011906, and moneys had been appropriated by the Parliament for the purposes of the trust account, or for any purpose for which the trust account was established the appropriation was not to lapse at the close of the financial year for the service of which it was made and the Treasurer could in any year (subject to section 87 of the Constitution) pay to the credit of the trust account, out of the Consolidated Revenue Fund, such moneys as the Governor-General thinks necessary for the purposes of the appropriation.

This Act was superseded by the Surplus Revenue Act 1909, which, in its turn was superseded by the Surplus Revenue Act 1910 which federalized income and expenditure and provided for a subsidy at the rate of 25s. per head of its population being granted to the States for 10 years thereafter.

§ 162." GOODS IMPORTED INTO A STATE.”

It has been held that in the period between the establishment of the Commonwealth and the imposition of uniform customs duties, the State of Tasmania was not entitled, under the Constitution, to be credited with duties of customs collected by the Commonwealth in the State of Victoria on goods imported into Victoria and passing after the latter date therefrom into the State of Tasmania for consumption. It was held, also, for a similar reason, that the State of Tasmania was not entitled under the Constitution to be credited with duties of excise paid on goods produced in Victoria between the same dates and passing after the latter date therefrom into the State of Tasmania for consumption. Section 93 (1.) of the Constitution applies only to goods imported after the imposition of uniform duties of customs, and not of goods imported before that time: Tasmania v. The Commonwealth and State of Victoria, (1903) 1 C.L.R., 330.

§ 163. "CREDIT REVENUE AND DEBIT EXPENDITURE.” Retiring Pensions and Allowances.

An officer of a department of the public service of New South Wales who, on the transfer of the department to the Commonwealth, was retained in the service of the Commonwealth, was afterwards called upon to retire under the provisions of section 65 of the Com

monwealth Public Service Act 1902, and so became entitled by virtue of section 84 of the Constitution to a gratuity calculated in accordance with the scale provided by the New South Wales Public Service Act 1895, section 60, sub-section (II.). It was held by the High Court that the discretion conferred by the New South Wales Act, section 60 (II.), as to the amount of the gratuity was vested in the Governor-General by virtue of section 70 of the Constitution. It was further held that the gratuity, having been paid by the Commonwealth, was expenditure "incurred solely for the maintenance or continuance, as at the time of transfer" of the department, within the meaning of section 89, sub-section (II.) (a) of the Constitution, and was, therefore, by virtue of that sub-section and section 93 of the Constitution, wholly chargeable against the State: New South Wales v. The Commonwealth, (1908) 6 C.L.R., 215.

Distribution of surplus.

94. After five years from the imposition of uniform duties of customs, the Parliament may provide, on such basis as it deems fair, for the monthly payment to the several States of all surplus 164 revenue of the Commonwealth.

66 § 164. SURPLUS REVENUE.” Distribution of Surplus.

The Commonwealth Parliament has authority to appropriate money out of the consolidated revenue for a specific purpose, and money so appropriated, although not yet actually disbursed, is

66

expenditure" within the meaning of section 89 of the Constitution, and cannot form part of the "surplus revenue" distributable among the States under section 94 until the actual disbursement of it for that purpose is no longer lawful or no longer thought necessary by the Government.

It was therefore held by the High Court that the sums appropriated by the Old-age Pensions Appropriation Act 1908 and the Coast Defence Appropriation Act 1908, were properly deducted from the revenue for the financial year in which the appropriations were made in order to ascertain the "surplus revenue

payable to the States in respect of that year under section 94 of the Constitution and section 4 of Surplus Revenue Act 1908: New South Wales v. The Commonwealth, (1908) 7 C.L.R., 179.

This was an action brought in the High Court by the State of New South Wales against the Commonwealth to recover from the defendants the sum of £160,000, which sum the plaintiffs claimed as moneys payable to the State by the Commonwealth as surplus revenues of the Commonwealth for the month of June 1908. On 3rd June 1908 the Treasurer of the Commonwealth, under the provisions of section 62A of the Audit Acts 1901-1906, established a trust account known as the "Harbour and Coastal Defence (Naval) Account" and defined the purpose of such Trust Account to be the payment of the cost of the harbour and coastal defence of the Commonwealth. On 3rd June 1908, the Treasurer under the provisions of section 62A of the Audit Acts 1901-1906, also established a trust account known as the Invalid and Old-age Pensions Fund," and defined the purpose of such trust account to be the payment of invalid and old-age pensions.

In the month of June 1908, the Parliament of the Commonwealth passed the Coast Defence Appropriation Act 1908, by which the sum of £250,000 was appropriated out of the Consolidated Revenue Fund for the purposes of the aforesaid Harbour and Coastal Defence (Naval) Account. This Act came into force on 10th June 1908. In June 1908 the Parliament of the Commonwealth passed the Old-age Pensions Appropriation Act 1908, by which the sum of £750,000 was appropriated out of the Consolidated Revenue Fund for the purposes of the aforesaid Invalid and Old-age Pensions Fund. This Act came into force on 10th June 1908. In June 1908 the Parliament of the Commonwealth passed the Invalids and Old-age Pensions Act 1908. This Act was assented to by the Governor General in the King's name on 10th June 1908. In June 1908 the Parliament of the Commonwealth passed the Surplus Revenue Act 1908. This Act came into force on 13th June 1908.

In the month of June 1908, after the passing of the aforesaid Acts, the Treasurer, purporting to act under and in accordance with the said Acts, paid to the credit of the Harbour and Coastal Defence (Naval) Account the sum of £250,000, and to the credit of the Invalid and Old-age Pensions Fund the sum of £182,000; and debited these sums against the States on the ground that the same formed portion of the expenditure of the Commonwealth within the meaning of the Surplus Revenue Act 1908. The proportion of these amounts debited to New South Wales was £160,000, and the balance payable and paid to the said State was thereby reduced