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The Honourable Murray Gleeson AC

Statutory Interpretation

That, his Lordship explained, is why, from the earliest days of income tax legislation, this elementary question was resolved on the basis that the cost of travelling from home to the taxpayer’s principal place of work was treated “as a living expense as distinct from a business expense”. The precise statutory language has changed a little over the years. In Australia the question is whether an outgoing is incurred in gaining or producing assessable income. The force of the preposition “in”, and the required relationship between outgoing and income, was most recently considered by the High Court last year in Federal Commissioner of Taxation v Day.20 The point about travelling expenses is that the legislation was enacted in a well-understood historical and decisional context, which has had a powerful influence on its interpretation and application to a very old question. If the problem arose for fresh consideration, divorced from that context, it is, to say the least, not obvious that the same answer would be given. But Parliament has legislated, and its legislation has been administered, on the faith of an understanding which has now become controlling. This is part of the context in which the statutory language, repeated in the 1997 Act, is to be read.

The standard English text on statutory interpretation describes this as “informed interpretation”.21 I have already referred to the importance, in understanding the phrase “necessarily incurred” in provisions as to allowable deductions, of the fact that it appears in the context of an Act about assessing liability to tax rather than an Act about measuring efficiency, or an Act prohibiting wasteful expenditure. Last year, in W R Carpenter Holdings Pty Limited v Federal Commissioner of Taxation22, the High Court had to construe provisions of the 1936 Act to decide




[2008] HCA 531, (2008) 83 ALJR 68. Bennion, Bennion on Statutory Interpretation, 5th ed (London Lexis Nexus, 2008) at 589. [2008] HCA 33 at [9]; (2008) 82 ALJR 1211.

© The Honourable Murray Gleeson AC, Chief Justice of New South Wales 1988-1998, Chief Justice of Australia 1998-2008


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