Ron Williams won a pyrrhic victory with his success in the High Court over Commonwealth funding of chaplains in state schools. Yes, he won the case -- but is unlikely to see the back of chaplains in his children's schools. The greatest legacy of the case may lie in another channel: a dampening of pork-barrelling, with politicians more likely to be forced to funnel pre-election money through properly legislated and overseen programs.
First, the case in question. Williams won; the current program of funding was held invalid, and importantly he won't have to pay costs for the case. But he didn’t win his argument that the arrangements breached a constitutional "separation of church and state". The High Court simply held that section 116 of the constitution, which prohibits requiring any religious test as a qualification for an office under the Commonwealth, was not breached because the chaplains did not hold an "office under the Commonwealth". No great principle of the "separation of church and state" was established or acknowledged.
Instead, Williams won on the ground that the Commonwealth did not have the power to make or implement the funding agreement without legislative authority to do so. The Commonwealth had not enacted legislation to support its chaplaincy funding scheme. Instead, it relied upon its executive power to enter into contracts and used these contracts and guidelines to set up the rules for the scheme and to provide for its funding. The High Court held that this was not enough to support the expenditure of public money.
However, there are other valid means by which the Commonwealth could achieve the same ends. For example, it could make a grant of the money to the Queensland government and impose conditions that determine how the money is used. Queensland apparently has its own scheme for chaplains in schools, so it would probably be quite easy for the Commonwealth to aid in funding that arrangement.
It is unlikely that Williams will see the removal of chaplains in the school his children attend. He won the battle, but not the war.
Williams’ legacy, however, will be greater constraint upon the Commonwealth in the way it spends public resources. For decades, the Commonwealth has taken an extremely robust view of its own powers. Even though the constitution only gives it limited, specified powers, the Commonwealth has got around this in many cases by exercising its financial power to run government programs and make grants, through either legislation or contract. On the legislative front, the Commonwealth took the view that its power to appropriate money was sufficient to support its expenditure of that money on any subject it liked. This was rejected by the High Court in 2009, which held that it needed a separate head of legislative power.
The other way the Commonwealth has funded grants or programs has been to enter into funding contracts with third parties. The Commonwealth, as a polity, has the legal capacities of a person, including the power to enter into contracts. This was the method it used to support the chaplaincy program. In the Williams case, the High Court rejected the constitutional effectiveness of this method too, holding that this form of contractual expenditure of public money needed legislative support. Whether or not the Commonwealth has a legislative head of power to support such payments is doubtful.
There is, of course, a perfectly valid way of making such payments, and that is to pay the money to the states, with conditions attached, so that exactly the same outcomes are achieved. This is the way grants to third parties and other government programs have been handled for many decades. For example, the Commonwealth has given roads funding to local government through tied grants to the states since the 1920s.
It was only during the Whitlam era that the Commonwealth sought to fund local government directly (and initiated a referendum in 1974 to validate its actions -- which was defeated). That failed experiment was revived by the Howard government in 2000. In both cases the main reason for bypassing the constitutionally valid method of making tied grants to the states was to achieve greater kudos and political support for the Commonwealth through direct funding that is more publicly associated with the Commonwealth.
So what are the ramifications of the Williams case? Programs that involve the funding of third parties through contracts where there is no legislative backing are vulnerable and would need to be reconsidered. Either the Parliament would need to enact legislation to support them, if it had a head of power to do so, or the funding would have to go through the states.
At biggest risk here would be pre-election pork-barrelling where local Commonwealth MPs hand out grants to community groups in order to gain support for their re-election. The Williams case might have the happy effect of dampening pork-barrelling and forcing community support funding to go through properly legislated and overseen programs.
Other Commonwealth funding, such as roads funding to local government under the "Roads to Recovery" scheme and the funding of private schools, is already supported by Commonwealth legislation. The Williams case would therefore not have a direct effect upon it. Commonwealth funding for private schools occurs through tied grants to the states, so it is constitutionally safe. The only vulnerability of the Roads to Recovery program lies in whether the Commonwealth’s legislation is sufficiently supported by a head of power.
'Even if it is not, then the Commonwealth could revert to the tried but true system of tied grants to the states that it previously used for many decades. It may not be able to buy as many votes per pot-hole fixed, but surely the funding of roads is more important than that?