Australia, March 31 – More than $7 million stimulus package cheques are being held after the High Court challenge puts the tax office into a holding pattern. Payments to 7.4 million Australians are due to be sent out April 6, but the High Court still has not made a decision on the challenge brought by law lecturer Bryan Pape.

According to Pape, the payments exceed the Federal Government’s taxation powers. The full bench of the High Court has set aside two days to review the challenge.

“If the High Court were to rule the measure unconstitutional, then I could not make the payment,” said the Australian Taxation Office Commissioner Michael D’Ascenzo.

The laws of the Parliament enable the tax office to pay bonuses up to $900. It won’t be classified as an act of taxation, but as a gift.

“We were hoping to do it from the sixth (of April) if we could, but it will depend upon the High Court decision,” says D’Ascenzo.

Pape, on the other hand, produced a list of rebates and surcharges that have been released since the 1960s to stimulate the economy. He counters that the bonus, as a gift, is not something the Commonwealth has the general power to spend on.

The NSW Government intends to intervene in the case. State and territory governments have until the end of the day to make formal submissions.

The Rudd Government has spent more than $50 billion to stimulate the economy through a range of measures. This latest set of bonuses is meant to support consumer spending and stimulate the economy.

Source:
theage.com.au
news.com.au