The constitutional fate of the Clean Energy Act

This post was first published on Opinions on High on 6 August 2013 as ‘News: Waiting for the mining tax case and forgetting about any carbon price case’
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Tomorrow we will learn of the High Court’s decision on the challenge by Fortescue Metals and others to the Commonwealth’s mining tax legislation – the Minerals Resource Rent Tax Act 2012 (Cth). The court heard that case in March this year. Professor Michael Crommelin from Melbourne Law School will be writing about the Fortescue case for Opinions on High.

Readers might recall that when public opposition, and threats about constitutional challenges, to the minerals resource rent tax was at its height, there were similar discussions about the carbon price legislation (the Clean Energy Act 2011 (Cth)). Here is an opinion by Professor George Williams from the time foreshadowing the likely constitutional objections to the mining tax and carbon price.

Nevertheless, there has still been no application made to the High Court to challenge the Clean Energy Act 2011. This is despite the many months of threats of challenge, and a writ and statement of claim being lodged with the court only a little over a month ago by Queensland Nickel.

Having reviewed that writ, it is apparent that the future of Australia’s carbon price is destined to be decided at the forthcoming election, and not by the High Court afterall. This is because the writ does not attack the legislation that creates and embeds within the economy the mechanism for pricing carbon. Instead, what Queensland Nickel is challenging is the constitutionality of the way the compensation scheme for trade exposed polluting industries was devised under separate regulations. Queensland Nickel argues that the compensation scheme discriminates across the states, inconsistently with section 99 of the Constitution, because it advantages some states, like Western Australia, over others, including Queensland. It does not challenge the carbon price.

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