Does Section 55 of the Australian Constitution render the carbon tax unconstitutional?

The Carbon Tax Legislation (Clean Energy Bill 2011) passed the Senate today and speculation as to the constitutionality of the regime is once again being raised.

Section 55 of the Constitution

A constitutional challenge to the carbon tax would most likely be predicated on section 55 of the Constitution which states:

Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect.

The reason behind the existence of this section is so that the House of Representatives cannot bypass the Senate by mixing tax legislation with non-tax related legislation (the Senate cannot originate or amend tax legislation).

Section 100 of the Clean Energy Bill 2011

Section 100(10) and (11) and of the Clean Energy Bill 2011 states:

(10)  If a carbon unit is issued to a person in accordance with this section, the person is liable to pay a charge for the issue of the unit.

(11)  Subsection (10) has effect only so far as it is not a law imposing taxation within the meaning of section 55 of the Constitution.

However, the bill creates two quite distinct regimes: the 2012-2015 fixed price and the post-2015 emissions trading scheme. This could potentially mean that one may be characterised as a tax and the other as not, meaning that the government has mixed non-tax legislation with tax legislation, thus violating section 55 of the constitution.

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