Govt's bonus payment challenged in court

The payments to 8.7 million Australians are in jeopardy after the High Court agreed to hear a challenge to their legality, brought by law lecture and former Nationals office holder Bryan Pape.

The government is due to start paying the bonus, under the Tax Bonus Act, in April as part of its $42 billion economic stimulus package.

But Mr Pape, who worked 20 years as a barrister before joining the University of New England in 2000, will argue the payment is unconstitutional and the government has no power to offer the bonus.

While the commonwealth would argue that its taxation powers gave it the right to provide the payment, labelling it the Tax Bonus Act did not make it an act of taxation, Mr Pape said.

"Saying so doesn't make it so, and the first question will be - is it a law with respect to taxation?" he told ABC Radio on Thursday.

"I say it is not. I say it is a gift, and that is not a law with respect to taxation, the way it has been framed."

The government will argue it is protected by four other powers under the constitution - the appropriations power, the nationhood power, the external affairs power and the interstate and overseas trade and commerce power - Fairfax newspapers reported.

Despite being former chairman of the Nationals New England electorate, Mr Pape denies he is acting politically to stymie the federal government's stimulus package.

Rather, he says he is testing arguments raised in a 2005 academic paper, in which he claimed the commonwealth was misusing its appropriations powers.

"It really stems from a paper I gave to the Samuel Griffiths Society (dedicated to upholding the constitution) in 2005," he said.

"That's when I canvassed most of these issues, and surprisingly a suitable vehicle came along to test this issue."

The High Court hearing, at which Mr Pape will argue the case himself, is scheduled for March 30 and 31.

The Australian Taxation Office has advised the High Court that if it is to stop printing cheques, it needs to be told by the close of business on April 2, Fairfax reports.

Is Mr Pape confident of winning the case?

"One can never be confident going to the High Court," he said.