Pape And Government Spending - No Cause For Alarm

Key Points:
Government departments and agencies cannot assume that section 81 will authorise the spending of money on whatever activities or objectives the government likes. Agencies should take prudent steps when formulating spending programs to ensure that Commonwealth spending does not exceed the limits set out in the decision.

The decision of the High Court in Pape v Commissioner of Taxation [2009] HCA 23 has prompted concerns of apocalyptic consequences for Commonwealth spending. While the Court takes a narrower approach to Commonwealth appropriations than might have been thought to be the case on a generous reading of the previous case-law, prudent decision-making processes on government spending are unlikely to come undone by the decision in Pape.