This article expands on previous comments that the Williams (No. 2) case is reason to reconsider Commonwealth engagement in land transport. 
The challenge to Government spending programs
Williams (No. 2) was the third recent challenge in the High Court to Commonwealth Government spending.
Before these three cases it was widely assumed the Government could spend as it sees fit. Governments worked on that assumption using the equivalent of Jack Sparrow’s compass to guide them; Conservative administrations set course towards rural roads, Labor steered to cities.
The three High Court cases should consign the assumption, the compass and lack of proper Commonwealth direction to the deep. 
The three cases
The first case, Pape (2009), challenged part of the Government’s response to the Global Financial Crisis; payments to taxpayers. The Court unanimously agreed that Commonwealth spending must be supported by legislation or implied executive power. A 4-3 majority however considered the payments lawful under an implied ‘nationhood power’ in times of a national economic emergency. 
This decision was seen as raising questions about grants unrelated to national emergencies. In 2012 Mr Williams challenged the school chaplains program on the basis of a lack of supporting legislation. This challenge succeeded and should have sent a shudder through the Government:
- a private citizen overturned Government spending;
- many Commonwealth programs similarly lacked a legislative basis;
- the High Court decision was a 6-1 majority. 
The Commonwealth response, broad legislation seeking to authorise many Government programs, virtually invited another challenge. Mr Williams obliged, claiming Parliament lacked power to legislate for the chaplains program, chaplains not being mentioned in the Constitution.
In 2014 the High Court, in a judicial slapdown of the Commonwealth, unanimously decided:
- Parliament’s ability to legislate does not provide the Government with spending power, actual legislation (or implied executive power) is required;
- in any event, Parliament lacks power to legislate with respect to the chaplains program;
- funding agreements or contracts cannot validate Government spending;
- intergovernmental agreements cannot create Commonwealth powers;
- convenience and merit are not relevant;
- the Australian Government does not have the same powers as other national governments;
- Commonwealth power is not correlated with national significance because of inherent circularity; otherwise the Commonwealth could circumvent Constitutional limits. 
The result in Williams (No.2) is that payments made under the chaplains program were unlawful and became debts to the Commonwealth. The Treasurer subsequently ‘forgave’ these debts.
The three cases attracted expert commentary, including about a ‘loophole’ through which the Commonwealth can practically spend on anything; i.e. s.96 conditional state grants (specific purpose payments). These grants can only be provided to the states and the power to set conditions (such as: ‘funds must be spent on chaplains or roads’) lies with Parliament. 
There are unresolved questions about such grants:
- How far can Parliament delegate condition setting powers to the Government?
- If delegation of s.96 powers is allowed, how can it be amended or revoked? 
The significance of the cases and s.96 questions extend beyond Commonwealth spending. They are part of a debate about control of executive government; a debate not limited to the Commonwealth or Australia. The debate is familiar to readers of Pearls and Irritants echoing in topics like foreign policy, migration, vested interests, the Solicitor General and willingness to declare war.
The Constitution has a sensible scheme for Commonwealth spending. The Government, formed in the House of Representatives, can spend:
- on matters essential to its character as a Government (implied executive power); and
- on Commonwealth purposes set out in the Constitution, agreed with the Senate (legislation); and
- on any purpose, whether or not identified in the Constitution, agreed with the Senate and relevant states (s.96 grants).
The scheme allows the Commonwealth to enter new fields, even state matters, provided the states’ House (the Senate) and affected states agree. The executive is not to dominate the states.
Another possible loophole arises if the Government can validly forgive debts arising from its incapacity to spend. Then the Government could spend as it likes knowing that straying beyond power will be forgiven. This is yet to be tested.
Implications for transport, infrastructure
The Court’s reasoning in Williams (No. 2) is relevant to transport, infrastructure and cities because, like chaplains, these are not topics mentioned in the Constitution.
After Williams (No. 2) experts noted some Commonwealth programs, including road spending, may lack a proper basis. Subsequent amendments to the National Land Transport Act indicate uncertainty about spending on matters such as suburban roads and ‘blackspots’. The legality of (spending under) the amendments has not been tested, yet. 
Also the Senate has sought to more closely scrutinise the legal basis of Government spending. 
The reasoning in Williams (No. 2) rejected common arguments for Government funding of transport and infrastructure. Arguments also likely to suffer rejection include: financial capability; co-ordination; hypothecation of revenues; ‘deals’ to promote economic growth and revenues.
The Constitution’s s.96 concerns what the Commonwealth can do rather than what it should do. Basic governance principles such as aligning power with responsibility, transparency and subsidiarity should inform its use. As s.96 funding can expand the effective reach of the Commonwealth beyond that set in the Constitution, Parliament should closely control its use.
There are many implications. Parliament ie. the Senate as well as the Government, should receive proposals for and be given expert advice on such funding and the policies behind them. Such advice cannot properly come from a Department which is a part of the Government.
The content and process of Commonwealth involvement in transport infrastructure needs reconsideration. As a start, Jack Sparrow’s compass should be handed to the Senate.
John Austen is a happily retired former official. He was Director of Economic Policy for Infrastructure Australia from its inception in 2008 to his retirement in 2014. Further background is at: thejadebeagle.com.
 eg. Was Ross right? At thejadebeagle.com
 Pirate captain Jack Sparrow was the lead character in the Disney movie series ‘Pirates of the Caribbean’. His compass, would point at the thing he wanted most.
 Pape v Commissioner of Taxation  HCA 23
 Williams v Commonwealth of Australia  HCA 23 (Williams No. 1)
 Williams v Commonwealth of Australia  HCA 23 (Williams (No. 2)
 Commentary examples include:
Professor Cheryl Saunders https://blogs.unimelb.edu.au/opinionsonhigh/2014/06/25/saunders-williams/#more-4036
The commentary notes the Williams cases implicitly shifted power from the executive to the Parliament eg. requirement for spending is pre-existing legislation, rather than what was described as ‘the common assumption’.
 Delegation of s.96 power is discussed by Cheryl Saunders, Towards a theory for s.96, at http://www.austlii.edu.au/au/journals/MelbULawRw/1987/1.pdf. While Saunders argues that the ability of Parliament to delegate is ‘settled’ there remain unanswered questions arising from the nature of the section – an afterthought to the drafting of the Constitution. That discussion, in 1987, predates the Williams cases.
 The uncertainty about roads is also borne out by the exhaustive listing of potential heads of power in the section ‘Alternative constitutional basis’ see: https://www.legislation.gov.au/Details/C2014C00691 .
 See: Glenn Ryall and Jessica Strout, Scrutiny Committees – A Vehicle for Safeguarding Federalism and the Constitutional Rights of Parliament, Australia New Zealand Scrutiny of Legislation Conference, July 2016.