The High Court has agreed to hear a challenge to the legality of the Federal Government's proposed $900 tax bonus to 8.7 million taxpayers.
The case has been brought by a law lecturer and former National Party office holder, Bryan Pape, a champion of states' rights.
The High Court will hear the case on March 30 and 31.
The Government plans to begin paying the bonus, part of its $42 billion economic stimulus package, in April.
The court has been advised by the Australian Taxation Office that, if it is to stop printing cheques, it needs to be told by the close of business on April 2.
Mr Pape, who worked as a barrister for 20 years before joining the University of New England in 2000, will argue the case himself.
He has a longstanding interest in constitutional issues, with a particular focus on financial relations between different levels of government.
In a 2005 paper he wrote: "By its use of the appropriation and grants powers the [Commonwealth] Parliament has expanded its authority in its quest to gain absolute power over the states."
Mr Pape said yesterday he was not motivated by the debate over the need for a large fiscal stimulus to address the global financial crisis.
"I'm not an economist," he said. "There's a question of: are you going to have a constitution or aren't you?"
The Government could have delivered a bonus "quite easily, but the way they have done it has problems," he said.
Mr Pape said he had not discussed the case with the National Party and was bringing it as "a concerned citizen, or a better description would be as a concerned lawyer".
He was chairman of the party's New England federal electorate council until last year, and remains a party member.
Mr Pape said if he wins the case, he expects it will affect the Government's ability to fund programs such as computers in schools and road projects.
Although he has criticised such payments in the past as reducing states' rights, the tax bonus is the first spending program he has challenged in court.
"This is an issue where I believe I have standing because I am a supposed recipient," Mr Pape said. "In the past I couldn't challenge any other law because I didn't have standing."
The Government has filed a defence document in which it agrees that Mr Pape has identified an issue appropriate to be heard as a constitutional case.
However, it says its Tax Bonus for Working Australians Act, passed in February, is valid law.
It will rely on five powers under the constitution: the appropriations power; the nationhood power; the external affairs power; the interstate and overseas trade and commerce power; and the taxation power.
Mr Pape's statement of claim says that the tax bonus "is characterised as a gift".
The Tax Bonus Act is "not a law with respect to taxation" and "contains no provision which lawfully appropriates money for the purposes of the Commonwealth," it says.
The Government plans to pay $900 to people whose taxable income is up to $80,000, $600 to those whose income is between $80,000 and $90,000, and $250 to those whose income is between $90,000 and $100,000.
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