Federal Spending Power in Three Federations: Australia, Canada and the United States

This paper considers the federal spending power in three comparable jurisdictions - Australia, the United States and Canada. The article responds to a recent High Court of Australia decision which apparently denied that the federal government had a separate head of power to spend. It would (at least in theory) need to demonstrate that its proposed spending was in an area over which it had been given specific constitutional power, in order to be valid. This decision presents a serious obstacle to governance in Australia. The federal government has vast access to taxation powers, with the states having very limited access. There are increasing calls for a national, rather than local, approach to many areas of public policy, given the economic and social integration of the nation. It is necessary to accord the federal government broad spending power in order for it to respond to these demands effectively, contrary to the High Court decision. Other jurisdictions have accorded the federal government significant spending power.