Why Dutton won’t be referred to the High Court

It has not taken long for section 44 of the Constitution to rear its head again.

This time, questions are being asked about former home affairs minister and would-be prime minister Peter Dutton. His position is different, though, from that of his predecessors. He can meet any suggestions with confidence because there is no likely scenario that will see him removed from parliament.

Most of the focus on section 44 has been its impact on dual citizens. Section 44(v) also provides that a person is ineligible to sit in parliament if they have “any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth”. Such an interest is permitted only when it is through a company with more than 25 shareholders.

At the time of the 2016 election, this clause was a dead letter.

A decision by chief justice Sir Garfield Barwick in 1975 read section 44(v) so narrowly that it left little scope for disqualification. This freed parliamentarians to make money by contracting with the commonwealth, even where this gave rise to a conflict of ­interest.

This changed last year when the High Court took a radical turn in disqualifying senator Bob Day. The court rejected Barwick’s narrow approach, instead emphasising the importance of section 44(v) in preventing our politicians from profiting from their position.

The court held that a stricter approach was needed to prevent parliamentarians from lining their pockets at the expense of the public good.

The result is a new reading of the section that disqualifies politicians for arrangements they had thought to be above board. These include where parliamentarians receive a financial benefit from the commonwealth via a family trust. Members face disqualification even where they have carefully structured their affairs in line with the High Court’s prior approach. Section 44 operates by automatic effect and the court provides no period of grace.

Dutton is a beneficiary of a family trust that owns two childcare centres in Queensland. It is arguable that he is disqualified from parliament because these centres receive childcare subsidies from the commonwealth in return for providing childcare services. He has a personal interest in ensuring that childcare subsidies are as high as possible to maximise his investment.

Each High Court case turns on its facts, and the court has not yet ruled on this type of arrangement. Day was disqualified because he had an interest in a company that owned premises leased to the commonwealth for his electorate office.

Dutton’s arrangements are far less specific and involve the ­receipt of money from a nationwide childcare scheme.

It also is not clear that Dutton is receiving a financial benefit under an agreement between the childcare centres and the commonwealth. All up, the likelier result is that Dutton can remain in parliament.

These matters could be resolved by the High Court, but that is unlikely to occur. Earlier this year, a rival candidate brought a similar case under s 44(v) against Coalition frontbencher David Gillespie. The court rejected the case out of hand, finding that it would hear matters of disqualification only where they are lodged within 40 days of an election or have been referred by the relevant house of parliament.

This means that Dutton will have his day in court only if his case is referred by the House of Representatives. It is not conceivable that the government will use its slim majority to do so, and so his arrangements will remain ­untested.

This reveals a deeper problem with where the debate has come to rest. Whichever party has the numbers in the House of Representatives can shield its MPs from High Court scrutiny. The party can prevent the disqualification of one of its own, even where it is clear the politician has broken the law and sits in parliament in defiance of section 44.

George Williams is dean of law at the University of NSW.