R v Barger[1] is a 1908 High Court of Australia case where the majority held that the taxation power[2] could not be used by the Australian Parliament to indirectly regulate the working conditions of workers.

The secretary of the Attorney-General's Department, Sir Robert Garran, later recalled that Isaacs "had a remarkably keen brain but it was apt to be sometimes too subtle for my liking.

When we were drafting a bill whose constitutionality was not beyond doubt, his devices to conceal any possible want of power were sometimes so ingenious as to raise, rather than evade, suspicion".

[5] Both Isaacs and Higgins had previously been members of the Parliament of Victoria and in 1896 supported the trial introduction of a minimum wage.

[10] The Excise Tariff Act 1906 contained a proviso that the excise would not be payable if the manufacturer paid "fair and reasonable" wages as follows: Provided that this Act shall not apply to goods manufactured by any person in any part of the Commonwealth under conditions as to remuneration of labour which— Hugh Victor McKay, one of Australia's largest employers, owned the Sunshine Harvester Works where agricultural machinery was built.

In 1907 McKay applied to the Commonwealth Court of Conciliation and Arbitration for a declaration that the wages at his factory were "fair and reasonable".

Both McKay and another manufacturer of agricultural machinery in Melbourne, William Barger, were prosecuted by the Commonwealth for failing to pay the excise.

The State of Victoria obtained leave to intervene in both cases and similarly argued the Excise Act 1906 was invalid.

[15] Their Honours held that the Excise Tariff Act 1906 was invalid because it was not in substance a tax, but rather an impermissible attempt to regulate the conditions of manufacture, and that went beyond extent of the taxation power.

Their Honours approached the substance of the Act by considering the position of the States, which could directly regulate the wages of employees in manufacturing, and could enforce that with a penalty for non-compliance.

[2] This was the first occasion this issue had been considered by the High Court, although Griffith CJ had previously handed down a decision whilst Chief Justice of Queensland that an excise which exempted goods on which customs or excise duties had been paid under state legislation did not discriminate between the states, holding that "[i]f the imposition of these duties leads to an inequality, it is not a defect in the Federal law; it arises from the fact that the laws of the States were different, which is quite another thing"[19] This decision was affirmed on appeal by the Privy Council.

Thus the question of whether it discriminated between States could only arise on the hypothesis that the primary finding was wrong and the law was "with respect to taxation".

Because the Conciliation and Arbitration Act required the Court to have regard to local circumstances, it followed that the wages payable under an award "might vary according to the area within which the manufacture was carried on."

The majority described the applicable rule in this case as "different, but ... founded upon the same principles", concluding that the power of taxation could not be exercised so as to operate as a direct interference in the internal affairs of the States.

The doctrine had been established and affirmed in earlier cases by the original High Court Bench (Griffith CJ, Barton and O'Connor JJ) who were the majority in this decision.

The beginnings of the overturning of the doctrine were already evident in the dissenting decision of Isaacs and Higgins, who held that neither the purpose nor the effects of the Act were a valid objection for the exercise of the taxation power.