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[1994] HCA 8
High Court of Australia
1980-01-01
McHugh JJ, Gaudron JJ, Dawson J, Burchett J
Original judgment source is linked above.
For the reasons Toohey J. and I gave in Mutual Pools Pty. Ltd. v The Commonwealth [42] , the reduction or extinction of a liability, even though it may confer a financial or monetary advantage upon the person whose liability is reduced or extinguished, does not result in the acquisition of property by that person. That is not because no money passes hands. It is because nothing which answers the description of property is acquired. True it is that in that situation no coins or notes are involved, but the character of money is not dependent upon its physical qualities. They may not be present at all in a transaction involving the transfer of money and are of no intrinsic worth. Money is merely a medium of exchange; it is not an object of exchange. It represents value or purchasing power, but does not constitute property within the meaning of s. 51(xxxi) of the Constitution. The enactment of the Amending Act did not result in the acquisition by the Commonwealth of the chose in action assigned to Dr. Peverill by his patient. The value of the right which he acquired in the form of the chose in action was reduced, but the Commonwealth did not acquire any property.
Nor, in my view, can it be said that the Amending Act is a law imposing taxation. That argument appears to assume that any tax is imposed upon Dr. Peverill rather than the patient. That assumption is not, I think, crucial to the argument.
The familiar definition of a tax is that it is "a compulsory exaction of money by a public authority for public purposes, enforceable by law, and not a payment for services rendered" [43] . That definition is, of course, not exhaustive even when there are added to it the more recent requirements that a tax not be by way of penalty and not be arbitrary [44] . Whilst it may be possible in some circumstances for a tax to take a form other than the exaction of money [44] , in the context of s. 51 of the Constitution, which requires a line to be drawn between the taxation power (par. (ii)) and the acquisition power (par. (xxxi)), those circumstances, if they exist at all, must be limited. Nevertheless, a tax must, I think, be by way of exaction and where the exaction is of money, as it invariably is, it takes the form of the imposition of an obligation upon the taxpayer which is met by the payment of money. Money raised by taxation constitutes part of the revenue of the Commonwealth and, under s. 81 of the Constitution, forms part of the Consolidated Revenue Fund to be appropriated for the purposes of the Commonwealth in the manner imposed by the Constitution. Under s. 83, no money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law [45] .
In Australian Tape Manufacturers Association Ltd. v The Commonwealth Toohey J. and I remarked [46] :
Those characteristics of a tax which require it to be levied by a public authority for public purposes are important in that they reflect the general conception of a tax as a means of raising revenue for government (even if the aim of the tax is also to encourage or discourage behaviour of a particular kind). In consequence, the fact that an exaction is to be paid into a consolidated revenue fund is sufficient indication that the exaction is for a public purpose, hence a tax [47] . By inference, the strongest indication that an exaction does not constitute a tax is that the moneys raised do not form part of such a fund. 1. (1993) 176 C.L.R., at p. 522. 2. See R. v Barger (1908), 6 C.L.R. 41, at p. 82, per Isaacs J.; Moore v The Commonwealth (1951), 82 C.L.R. 547, at p. 561, per Latham C.J.; Parton v Milk Board (Vict.) (1949), 80 C.L.R. 229, at p. 258, per Dixon J.
In the present case there is no exaction: Dr. Peverill is not obliged to pay any amount for the purpose of raising revenue. The Amending Act reduces the liability of the Commonwealth to pay medicare benefits, but it does not, in my view, impose a tax. A tax may variously be described as an exaction, levy, contribution, duty, charge or even an extortion [48] , but whatever the description, taxation for the purposes of s. 51(ii) involves an obligation imposed by law to pay money which, when paid, will comprise government revenue and form part of the Consolidated Revenue Fund [49] . Of course, what amounts to an exaction etc. is a matter of substance rather than form. As Latham C.J. observed in Attorney-General (N.S.W.) v Homebush Flour Mills Ltd. [50] :
"Voluntary loans" and "gracious offerings" and "forced benevolences" are not unknown in our history. When such transactions amount to the exaction of money in obedience to what is really a compulsive demand, the money paid is paid as a tax. However, in my view, a person does not without more become a taxpayer merely by reason of the reduction or extinction of a liability which the government owes to him or her. 1. See Attorney-General (N.S.W.) v Homebush Flour Mills Ltd. (1937), 56 C.L.R. 390, at p. 408. 2. Australian Tape Manufacturers Association Ltd. v The Commonwealth (1993), 176 C.L.R., at p. 506. 3. (1937) 56 C.L.R., at p. 400.
For these reasons, I would hold the Health Insurance (Pathology Services) Amendment Act 1991 to be a valid exercise of legislative power, and allow the appeal.
The facts relevant to this appeal appear in other judgments. I shall not repeat them unnecessarily.
Section 20A of the Health Insurance Act 1973 Cth ("the Principal Act") permits a patient to assign the right to payment of a medicare benefit to the medical practitioner on the basis that the practitioner accepts the assignment in full payment of the medical expenses incurred. Sub-section (3) reads:
Where an assignment under this section takes effect, the medicare benefit is payable in accordance with the assignment.
It is apparent that upon an assignment in accordance with s. 20A, the respondent, Dr. Peverill, acquired a chose in action in respect of the medical benefit payable by the appellant, the Health Insurance Commission ("the Commission").
The Health Insurance (Pathology Services) Amendment Act 1991 Cth ("the Amending Act") is attacked in so far as that legislation reduced the medicare benefits payable in respect of ELISA testing in cases where patients had already assigned the right to payment of the benefit to Dr. Peverill but where the Commission had not yet made payment.
Dr. Peverill's challenge to the validity of the Amending Act to the extent that it deprives him retrospectively of payment for ELISA tests in accordance with the medicare benefit applicable at the time of assignment is based primarily on s. 51(xxxi) of the Constitution which empowers the Commonwealth to make laws with respect to:
The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws.
The meaning and scope of s. 51(xxxi) are discussed, not only in the judgments in this matter but also in the judgments in Mutual Pools & Staff Pty. Ltd. v The Commonwealth [51] , Georgiadis v Australian and Overseas Telecommunications Corporation [52] and Re Director of Public Prosecutions; Ex parte Lawler [53] . I do not propose to go over the same ground again. At issue is whether s. 51(xxxi) has any application in the present case.
The Parliament's power to make the Principal Act derives from s. 51(xxiiiA) of the Constitution which includes the provision of "sickness and hospital benefits, medical and dental services". The power to enact the Amending Act derives from the same paragraph, read if necessary with the incidental power in par. (xxxix). The fact that the legislation has some retrospective operation does not detract from that power [54] .
Section 51(xxxi), it has been said, serves a double purpose [55] :
It provides the Commonwealth Parliament with a legislative power of acquiring property: at the same time as a condition upon the exercise of the power it provides the individual or the State, affected with a protection against governmental interferences with his proprietary rights without just recompense. It follows that if a law of the Parliament constitutes an acquisition of property, par. (xxxi) will invalidate the law unless it provides just terms. 1. Bank of N.S.W. v The Commonwealth ("the Bank Nationalization Case ") (1948), 76 C.L.R. 1, at p. 349, per Dixon J.
Inevitably the focus of inquiry has been whether there has been an acquisition of property. The purpose of the paragraph was seen in this way by Dixon J. in Grace Bros. Pty. Ltd. v The Commonwealth [56] :
The power conferred by s. 51(xxxi) is express, and it was introduced as a specific power, not, like the Fifth Amendment, for the purpose of protecting the subject or citizen, but primarily to make certain that the Commonwealth possessed a power compulsorily to acquire property, particularly from the States. The condition "on just terms" was included to prevent arbitrary exercises of the power at the expense of a State or the subject. 1. (1946) 72 C.L.R. 269, at pp. 290-291.
The passage does serve to demonstrate the need to identify an acquisition of property and to avoid erecting par. (xxxi) into a wider guarantee than the Constitution warrants. The matter of identification lies very much at the heart of Georgiadis v Australian and Overseas Telecommunications Corporation as it does in the present case. But the search for identification of acquired property should not obscure the fact that a subject of legislative competence may be "altogether outside the scope of s. 51(xxxi)" [57] . In Attorney-General Cth v Schmidt the Court upheld, under the defence power, sections of the Trading with the Enemy Act 1939 Cth [58] even though they provided for the proceeds of the windings-up of certain businesses to be paid to the Controller of Enemy Property in circumstances where property was not to be returned to German ownership or control. The imposition of taxation and the operation of forfeiture provisions in connexion with criminal proceedings provide parallels [59] .
In the present case, the Amending Act excluded the ELISA test from the relevant item of medical benefit and made it the subject of other items so as to provide an amount of medical benefit varying according to when the test had been conducted. This had the effect of providing a lower level of medical benefit than had been the case when Dr. Peverill took certain assignments from his patients.
Whether s. 51(xxxi) is applicable may be tested by looking at the position of the patient who assigned his or her medical benefit to Dr. Peverill. Had there been no assignment when the Amending Act operated to reduce the benefit payable for an ELISA test, could it be said that there had been an acquisition of property from the patient?
The answer to that question is, in my view, no. By the Principal Act the Parliament conferred on patients a range of medical benefits. It did so as part of a complex regime of health insurance. Section 20 is part of that regime. Sub-section (1) provides that a medicare benefit "is payable by the Commission on behalf of the Commonwealth to the person who incurs the medical expenses in respect of that service". But the Parliament may alter, whether by way of increase or decrease, prospectively or retrospectively, the benefits it pays as part of that scheme. The language of Latham C.J. in Allpike v The Commonwealth [60] is apposite:
In the case of the Commonwealth, therefore, such right as there is is the creation of Commonwealth statute or Commonwealth regulation. That right may be altered by the authority which created it. 1. (1948) 77 C.L.R. 62, at p. 69.
Relevantly, the position did not alter because there had been an assignment of medical benefit to Dr. Peverill. He took the benefit of the assignment, as he was entitled to do. However, the Parliament remained competent to alter the regime of health insurance and to provide a recoupment to Dr. Peverill in accordance with the regime as formulated from time to time, even if the consequence was a reduction in the Commission's liability to make payments. That is not to say that Dr. Peverill's entitlement to be paid the medicare benefit is not property. It constitutes a chose in action and, for reasons that appear in my judgment in Georgiadis , answers the description of property. But the Amending Act effects no acquisition of property, because it is impossible to identify any property or interest in property acquired by the Commission. Indeed, the operation of the Amending Act lies outside the scope of s. 51(xxxi) but within the scope of s. 51(xxiiiA). It is in truth a law regulating benefits for services of the kind identified in par. (xxiiiA). It is not a law relating to the acquisition of property for a purpose in respect of which the Parliament has power to make laws.
As to the appellant's argument that the Amending Act is a law imposing taxation, I have read what Dawson J. has said in that regard. I agree with his Honour's conclusion that the Amending Act does not impose a tax and with his reasons for reaching that conclusion. I have nothing to add.
Pursuant to the provisions of the Judiciary Act 1903 Cth, the Court has removed into this Court an appeal pending in the Full Court of the Federal Court against a judgment of Burchett J. given in that Court. His Honour held that the Health Insurance (Pathology Services) Amendment Act 1991 Cth ("the Amending Act") is beyond the powers of the Parliament of the Commonwealth in so far as it purported to reduce the amount of payments owing by the Health Insurance Commission to Dr. Richard Edwin Peverill. The principal question that arises in the appeal is whether the Amending Act provides for the acquisition of property of Dr. Peverill on terms that are not just, contrary to the provisions of s. 51(xxxi) of the Constitution. If that question is answered in the negative, a further question arises as to whether the Amending Act is invalid because it would result in a breach of s. 55 of the Constitution.
In 1990, Dr. Peverill commenced an action against the Health Insurance Commission in the Federal Court. He sued to recover moneys owing by way of an assignment of medicare benefits in respect of pathology services, rendered to patients between 3 December 1984 and 31 July 1989. By virtue of s. 20 of the Health Insurance Act 1973 Cth ("the Principal Act"), a "medicare benefit in respect of a [pathology] service is payable by the Commission on behalf of the Commonwealth to the person who incurs the medical expenses in respect of that service". However, s. 20A provides that a practitioner may accept an assignment of a medicare benefit "in full payment of the medical expenses incurred in respect of the professional service by the [patient]". If the practitioner does so, that person has a right to payment from the Commission of an amount that is generally 85 per cent of the appropriate fee specified in the schedule to the Principal Act. Dr. Peverill claims that each of the medicare benefits payable to his patients has been assigned to him "within the meaning of and for the purposes of Section 20A of the Act". He also claims that the pathology services which he rendered fell within item 1345 of Sch. 1A to the Principal Act or within schedule provisions that Sch. 1A has replaced. In its amended statement of defence, the Commission alleged that the Amending Act excluded the services allegedly rendered by Dr. Peverill from item 1345. In his reply, Dr. Peverill alleged that the Amending Act was invalid because it contravened s. 51(xxxi) or, alternatively, s. 55 of the Constitution
An order was made by consent that the constitutional issues raised in the amended statement of defence and the amended reply should be decided separately. On the trial of the separate issue, Burchett J. held that, upon the basis of the facts alleged in the statement of claim, the Amending Act was invalid in so far as it purported to abolish Dr. Peverill's assigned right to the payment of medicare benefits payable under item 1345. His Honour held that the Amending Act purported to acquire property of Dr. Peverill without according compensation on just terms, contrary to s. 51(xxxi) of the Constitution. His Honour found it unnecessary to decide whether the Amending Act was also in breach of s. 55 of the Constitution.
The relevant history of the matter began on 9 May 1984. On that day, the Department of Health, acting on a recommendation of a statutory body ("the Medical Benefits Advisory Committee"), purported to create a new item in the schedule of fees to cover pathology services of the kind that Dr. Peverill has rendered. Initially, the fee was set at $15.40. By November 1987, it had been increased to $18.40. In 1988, the Department received legal advice, which it accepted, that the new item had been inserted without lawful authority. Subsequently, the question as to what amount was payable for pathology services of the kind rendered by Dr. Peverill came before the Federal Court for determination. Dr. Peverill asserted that the services fell within item 1345 for which the fee was $34.50. The Federal Court upheld this contention [61] . Dr. Peverill then commenced the present action in the Federal Court in 1990 claiming payment under item 1345 for a large number of pathology tests performed between December 1984 and July 1989.
On 11 April 1991, the Bill, which became the Amending Act, was introduced into the House of Representatives. The Minister for Community Services and Health said that the purpose of the Bill was to validate the advices of the Medical Benefits Advisory Committee "so that claims and payments made in accordance with them will become valid and proper and to bring the legislation into line with the general practice in fact adopted at that time". According to the second reading speech of the Minister, if Dr. Peverill's action was successful, the liability of the Commonwealth in respect of such claims would be in the order of $100 million. The Bill received the royal assent on 24 April 1991.
The Amending Act retrospectively amends Sch. 1A and its predecessor, Sch. 1, to exclude from item 1345 pathology tests of the kind allegedly carried out by Dr. Peverill. Those tests are now covered by new items 2294(3), 2294(4), 2295(3) and 2295(4) which essentially give effect to the recommendations of the Medical Benefits Advisory Committee. If the services allegedly rendered by Dr. Peverill fell within item 1345, as he claims, the effect of the Amending Act, if valid, is to reduce the moneys owing by the Commonwealth to Dr. Peverill by more than 40 per cent.
Section 51(xxxi) of the Constitution provides that, subject to the Constitution, the Commonwealth shall have power to make laws with respect to:
The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws.
So far as possible the other legislative powers conferred by s. 51 of the Constitution are to be read subject to the provisions of s. [62] . Section 51(xxxi) is, therefore, both a source of power and a guarantee that the property of the individual will not be taken for public purposes except upon just terms.
However, not all acquisitions of property by the Commonwealth fall within the terms of s. 51(xxxi). In Mutual Pools & Staff Pty. Ltd. v The Commonwealth [63] , I pointed to various cases of acquisition of property by the Commonwealth where in the words of Dixon C.J. the "whole subject is altogether outside the scope of s. 51(xxxi)" [64] . Such cases include taxation, bankruptcy, forfeiture of property for breach of customs or criminal laws and the seizure of the property of enemy aliens. They are outside the scope of s. 51(xxxi) because they are cases where the taking of property by the Commonwealth is either an inevitable consequence of a power conferred by s. 51 or is a reasonably proportional consequence of a breach of a law passed under such a power.
The Commonwealth asserts that the powers conferred by s. 51(xxiii) and (xxiiiA) of the Constitution to make laws with respect to various classes of welfare benefits include the power to increase, reduce, abolish or otherwise amend the amount of such benefits at any time without infringing the guarantee embodied in s. 51(xxxi). Moreover, the Commonwealth contended that it makes no difference that legislation enacted under those paragraphs is expressed to confer a right or entitlement to a benefit. In the present case, s. 51(xxiiiA) of the Constitution was the source of the power to enact the relevant provisions of the Principal Act. That paragraph of the Constitution empowers the Commonwealth to make laws with respect to "[t]he provision of sickness and hospital benefits, medical and dental services". The Commonwealth contends that a statutory benefit conferred by that paragraph may be altered or revoked without infringing the provisions of s. 51(xxxi).
What Dr. Peverill acquired in the present case was an assignment of each patient's s. 20 medicare benefit. Although his right or entitlement was conferred by s. 20A, that right or entitlement on one view was no greater than the right or entitlement conferred on the patient by s. 20. The other view is that, because Dr. Peverill accepted the assignment in full payment for his services, his entitlement to payment was a new and independent entitlement which superseded the patient's entitlement. It is necessary, therefore, to examine the s. 20 and the s. 20A entitlements separately.
In my opinion, no acquisition of property for the purposes of s. 51(xxxi) occurs when an enactment of the Parliament amends or repeals a gratuitous statutory entitlement conferred by the Parliament. Nor is the case different when the beneficiary of the entitlement has fulfilled the conditions which govern the entitlement. It follows that the Parliament may withdraw the statutory entitlement, conferred by s. 20 of the Principal Act, to the payment of a "medicare benefit in respect of a professional service" even after that person has incurred the expense of that service.
As the Solicitor-General for the Commonwealth pointed out, decisions of this Court give little assistance on the question whether laws reducing or abolishing gratuitous statutory benefits payable by the Commonwealth infringe the guarantee embodied in s. 51(xxxi). In Allpike v The Commonwealth [65] , however, the Court held that no breach of s. 51(xxxi) occurred where, pursuant to the authority of a Commonwealth legislative provision, a Commonwealth officer directed that the undrawn and deferred pay of a deceased soldier and the interest thereon should be divided in a way which conflicted with the deceased's will. Dixon J. said [66] :
The provision applies prospectively from the passing of the Act in 1942 to persons who die after the date of the statute. So far as they are concerned, the provision deals with the devolution on death of money which will become payable under statute. Whether there will or will not be a right vested in them to the pay or deferred pay or allowances while they are serving as soldiers, the provision attaches to their title to the money a condition affecting its devolution on death. To do this is within the defence power. I think there is no basis for the argument that s. 51(xxxi) of the Constitution must be invoked in order to support a legislative direction of the course of devolution on death of property when such a thing falls within the purposes of the Commonwealth. Such a direction involves no acquisition of property and raises no question of just terms. The whole matter of the disposition on death of the pay, deferred pay and allowances of a soldier appears to me to be within Federal legislative power. 1. (1948) 77 C.L.R. 62. 2. (1948) 77 C.L.R., at pp. 76-77.
Allpike is authority for the proposition that, without infringing s. 51(xxxi), the Commonwealth can regulate a federal statutory entitlement to a payment even after the beneficiary of the payment has fulfilled the conditions entitling that person to the payment provided that the entitlement was made subject to the condition that it could be regulated. It need hardly be said that such a condition may be imposed expressly or by implication or by inference from all the circumstances of the enactment. Moreover, logically no distinction can be drawn between an entitlement subject to a condition of regulation and an entitlement subject to a condition of reduction or revocation.
The decision in Allpike is in accordance with a long line of authority in the United States which holds that statutory gratuities are not property for the purpose of the Takings Clause in the U.S. Constitution and can be altered or revoked before payment. The governing principle was stated by Pitney J. in New York Central R.R. Co. v White [99] :
No person has a vested interest in any rule of law entitling him to insist that it shall remain unchanged for his benefit. 1. (1917) 243 U.S. 188, at p. 198.
In accordance with this principle, the United States Supreme Court and federal courts have frequently and consistently held for more than a century that welfare and pension rights are not vested property rights and that Congress may cancel them at any time [1] . Eighteen years before the enactment of the Commonwealth of Australia Constitution Act 1900, the Supreme Court declared [2] :
No pensioner has a vested legal right to his pension. Pensions are the bounties of the government, which Congress has the right to give, withhold, distribute, or recall, at its discretion. 1. United States v Teller (1882), 107 U.S. 64, at p. 68; Lynch v United States (1934), 292 U.S. 571, at pp. 576-577; U.S. Railroad Retirement Board v Fritz (1980), 449 U.S. 166, at p. 174; Bowen v Gilliard (1987), 483 U.S. 587, at pp. 604, 607; Hoffman v City of Warwick (1990), 909 F. 2d 608, at pp. 616-617. 2. Teller (1882), 107 U.S., at p. 68.
Just over fifty years later, Brandeis J. in delivering the judgment of the Supreme Court in Lynch v United States [3] could say:
Pensions, compensation allowances and privileges are gratuities. They involve no agreement of parties; and the grant of them creates no vested right. The benefits conferred by gratuities may be redistributed or withdrawn at any time in the discretion of Congress. 1. (1934) 292 U.S., at p. 577.
This principle is seen as the necessary consequence of Congress' "plenary power to define the scope and the duration of the entitlement to benefits, and to increase, to decrease, or to terminate those benefits based on its appraisal of the relative importance of the recipients' needs and the resources available to fund the program" [4] . Consequently, non-contractual entitlements which the recipient has not yet received are not property for the purpose of the Takings Clause even though the recipient has a legitimate expectation that the entitlements will be received [5] .
The entitlement under s. 20 of the Principal Act must be taken to be conferred subject to repeal or alteration - including retrospective repeal or alteration - at the discretion of the Parliament. The plenary power conferred by s. 51(xxiiiA) extends to altering or repealing the entitlement to a gratuitous benefit conferred under that paragraph even where a person has met the conditions giving rise to the entitlement. It could not be maintained, for example, that a person who had turned sixty-five had a vested right, protected by s. 51(xxxi), to receive an age pension or that, consistently with the guarantee, the Parliament could not change the conditions upon which the pension was payable. Similarly, the right of payment under s. 20 to a person who has incurred a medical expense is subject to the condition that Parliament may alter, reduce or revoke the right [6] . Nothing in s. 20 specifically, or in the Principal Act generally, indicates a legislative intention by the Parliament that it will not alter, reduce or abolish s. 20 entitlements, prospectively or retrospectively. In the absence of any legislative expression to the contrary, the entitlement conferred by s. 20 - like any other statutory entitlement - must be taken to be subject to the condition that it may be altered, reduced or revoked at any time. Indeed, s. 4 specifically declares that the regulations may provide that the Principal Act is to have effect as if the general medical services table were varied by inserting or omitting an item or rule of interpretation in or from the table or by substituting another amount for an amount set out in an item in the table.
It is arguable, as the Solicitor-General for the Commonwealth contended, that the abolition or alteration of a s. 20 benefit involves no retrospective exercise of power even when the change in the law affects a right to payment in respect of a medical service already incurred. The Solicitor-General contended that a law which abolishes a benefit in respect of a period in the past operates prospectively to remove the present and continuing right to receive the payment. But whether or not this argument is correct, Parliament has plenary power to make laws with respect to the provision of medical benefits and this includes the power to alter, reduce or revoke them. Whatever the Parliament can do prospectively, it can do retrospectively [7] .
It follows that a law which alters, reduces or revokes a s. 20 benefit, whether prospectively or retrospectively, is not a law with respect to the acquisition of property for the purpose of s. 51(xxxi) of the Constitution. The s. 20 entitlement is granted subject to the condition that it may be altered, reduced or revoked at any time. A law which gives effect to that condition does not acquire any property of the beneficiary of the entitlement.
No doubt it is true that the right to payment conferred by s. 20 of the Principal Act constitutes property within the meaning of s. 51(xxxi) of the Constitution. The right to payment conferred by s. 20 is a right to obtain payment of a specialty debt [8] . It is a chose in action which is assignable by the Principal Act. Property for the purpose of s. 51(xxxi) is not confined to physical things. Under the general law, the term " "property" has ceased to describe any res, or object of sense, at all, and has become merely a bundle of legal relations - rights, powers, privileges, immunities" [9] . A similarly wide interpretation has been given to the term "property" in s. 51(xxxi). In Australian Tape Manufacturers Association Ltd. v The Commonwealth [10] , Mason C.J., Brennan, Deane and Gaudron JJ. expressly stated that a chose in action is property for the purpose of the paragraph [11] . If the Commonwealth legislated so as to enable one of its statutory agencies to acquire all the property of a particular person, it could not be doubted that, for the purpose of s. 51(xxxi), the property of that person would include the right to receive any payment owing by the Commission in respect of a medicare benefit [12] .
But the question in this case is not whether a right to payment of a medicare benefit is property. It is whether a law which alters or repeals the statute conferring that entitlement is, within the meaning of s. 51 of the Constitution, a law with respect to the "acquisition of property for any purpose in respect of which the Parliament has power to make laws". Because the right to payment which is conferred by s. 20 is conferred subject to any future alteration or repeal by the Parliament, a law which alters or repeals that entitlement is not a law with respect to the acquisition of property within the meaning of s. 51(xxxi). In the words of Dixon C.J. in Burton v Honan [13] "the whole matter lies outside the power given by s. 51(xxxi)".
However, it does not necessarily follow from Allpike and the United States cases that no breach of s. 51(xxxi) occurs if the Parliament of the Commonwealth alters or repeals a practitioner's right to payment arising out of the assignment of a medicare benefit. The practitioner who takes an assignment "accepts the assignment in full payment of the medical expenses incurred in respect of the professional service". That means that the practitioner who takes an assignment accepts the right to a payment of approximately 85 per cent of the amount of the schedule item in return for surrendering his or her contractual right to the fee payable by the patient. The Solicitor-General for the Commonwealth contended that the practitioner gives neither the Commonwealth nor the patient "a quid pro quo" for the payment. But in giving up his or her rights against the patient, the practitioner gives consideration for the payment authorized by s. 20A even if the Commission or the Commonwealth obtains nothing from the assignment. If the terms of s. 20A constituted a contractual offer on behalf of the Commission, the practitioner's agreement not to enforce payment of his or her fee against the patient would be sufficient consideration to make a binding contract between the parties [14] . It would be a misuse of language, therefore, to describe the s. 20A payment as a gratuity to the practitioner. Moreover, the practitioner's right to payment cannot be amended or repealed at the discretion of the Health Commission or the executive government of the Commonwealth. Upon accepting the assignment, the practitioner has a right enforceable at law against the Commission. That right is a chose in action. Unquestionably, it constitutes property for the purpose of s. [15] . But is a law that abolishes or reduces the amount of a benefit that is the subject of an assignment under s. 20A a law with respect to the acquisition of property for the purposes of s. 51(xxxi)? Or is the right of property created by force of s. 20A, like the entitlement under s. 20, created subject to the condition that it can be altered or even abolished by an exercise of power under s. 51(xxiiiA) without infringing s. 51(xxxi)?
In my opinion, in the absence of a contract, a right or entitlement to a payment created by federal law may be altered or abolished at any time without infringing the provisions of s. 51(xxxi) even though the beneficiary of the entitlement may have acted in reliance on the payment being made. Until the right or entitlement has been transformed into some other form of property recognized and enforceable under the general law, the head of federal power that created the right or entitlement may be exercised so as to alter or revoke that right or entitlement without infringing the guarantee embodied in s. [16] . Once the right or entitlement to payment is transformed into a payment or a judgment debt, for example, a new form of property is created which is not dependent upon federal law for its substance, recognition or protection. The Commonwealth can only acquire it by paying the price demanded by s. 51(xxxi). To hold that the right or entitlement may be altered or revoked before but not after payment does not mean that form has triumphed over substance. It simply means that, once the new property has been created, it is outside the scope of the power which created the original right or entitlement and can only be reached by an exercise of power under s. 51(xxxi).
In the present case, no contract was made between Dr. Peverill and the Commission. Section 20A does not contain an offer on behalf of the Commission, the acceptance of which creates a contract between the Commission and the medical practitioner. The terms of that section amount to no more than a declaration of legislative policy which the Commission must follow until it is altered or revoked by further legislation. In Dodge v Board of Education of Chicago [17] , the Supreme Court held that no vested right of property was affected by legislation which reduced the annuities payable to teachers who had retired or were eligible to retire pursuant to an earlier enactment. The earlier enactment had reduced the period of the teachers' tenure but had provided retirement annuities for them. They maintained that the earlier enactment was an offer to pay an annuity which they had accepted by remaining in service until their retirement. The Supreme Court said [18] :
In determining whether a law tenders a contract to a citizen it is of first importance to examine the language of the statute. If it provides for the execution of a written contract on behalf of the state the case for an obligation binding upon the state is clear. Equally clear is the case where a statute confirms a settlement of disputed rights and defines its terms. On the other hand, an act merely fixing salaries of officers creates no contract in their favour and the compensation named may be altered at the will of the legislature. This is true also of an act fixing the term or tenure of a public officer or an employe [sic] of a state agency. The presumption is that such a law is not intended to create private contractual or vested rights but merely declares a policy to be pursued until the legislature shall ordain otherwise. 1. (1937) 302 U.S. 74. 2. (1937) 302 U.S., at pp. 78-79.
In the present case, s. 20A did not provide for the execution of any contract on behalf of the Commission or the Commonwealth. Nor did that section confirm any settlement between the parties. It merely declared the current policy of the Parliament in respect of the payment of assignments of medicare benefits. It contained no offer of a contract to a medical practitioner.
No doubt, Dr. Peverill carried on his practice in reliance on the belief that the services which he rendered fell within item 1345 of the schedule and that he would be paid 85 per cent of the amount specified in that item if he accepted the assignment of a patient's medicare benefit. However, the element of reliance cannot transform a federal statutory entitlement into property, immune from the reach of the federal power which created it, as long as it remains accepted, as I think it must, that a person has no right to the continuation of a mere statutory benefit [19] . Participants in a field regulated by legislation cannot object if the legislative scheme is altered by subsequent amendments [20] .
The present case must, therefore, be considered on the basis that, although s. 20A gave Dr. Peverill a right to take an assignment of the patient's s. 20 benefit and an entitlement to be paid 85 per cent of the relevant item amount, that entitlement could be altered, reduced or revoked before it was converted into money or some other form of property. Whether the alteration, reduction or revocation affected the entitlement under s. 20A directly or, indirectly, by operating on the underlying s. 20 medicare benefit is a matter of no constitutional significance. Consequently, the entitlement under s. 20A did not differ in substance from the patient's entitlement under s. 20. It follows that Dr. Peverill's entitlement to payment under s. 20A was conferred subject to the risk that either it or the s. 20 benefit itself could be altered or revoked at any time by the Parliament. Because that is so, the Amending Act did not infringe the provisions of s. 51(xxxi) of the Constitution.
Counsel for Dr. Peverill also sought to uphold the judgment of Burchett J. by contending that the Amending Act imposed a tax into the Health Insurance Act contrary to the terms of s. 55 of the Constitution. He contended that the Amending Act effected a compulsory exaction of a specific liquidated amount and was within the traditional definition of a tax laid down in Matthews v Chicory Marketing Board (Vict.) [21] . Counsel then contended that the Amending Act "purports to insert provisions imposing taxation - namely ss. 2(2) and the reference to past dates in s. 4 and s. 5 at which the sections are said to have effect - into the Health Insurance Act 1973 ". Consequently, the Amending Act was in breach of s. 55 of the Constitution and invalid [22] . However, the Amending Act merely alters the statutory entitlement to payment or, on one view, abolishes that entitlement and substitutes another entitlement of lesser value. Such a law is not a law with respect to taxation but a law with respect to the "provision of sickness and hospital benefits, medical and dental services" within the meaning of s. 51(xxiiiA) of the Constitution. The Amending Act no more imposes a tax than legislation which reduces the value of an unemployment or pension benefit.
Health Insurance Commission
Peverill
High Court of Australia Mason C.J. Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. Health Insurance Commission v Peverill [1994] HCA 8