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Wednesday, 27 June 2012
Page: 4658


Senator RYAN (Victoria) (13:36): I rise to speak on the Finance Framework Legislation Amendment Bill (No. 3) 2012 because I think it is one of the bills of higher importance that will come before this parliament. In a Westminster parliament, there are few issues more important historically than the legislature's control over the power of the purse. In the Williams decision last week, which has provoked this particular piece of legislation, the High Court reasserted the power of the legislature over power of the purse. I find it particularly disconcerting that, after a High Court decision that has very serious implications for the power of the Commonwealth and the executive to appropriate and spend money, we are facing this bill, having been provided with very little notice. In fact, when it was first introduced into the other place yesterday, changes were still being considered and full notice had not been provided to the opposition. That stands in contrast to some other examples where urgent legislation has been necessitated by decisions of the High Court.

One that I am particularly familiar with is the Hammond case of 1997, where, on a reading of the excise powers, the power of state parliaments to levy what the High Court defined as an excise power—which was essentially anything between stages of production and sale of a good, and ruling out what had been known as franchise fees for tobacco and for petrol—had profound impact on state budgets.

Everyone knew that there was the potential for a decision like this from the High Court last week. We knew that because we had the decision in the Pape case recently, which flagged to members of this parliament and to members of the Australian community that the court was reading the power of the appropriation of funds, and in particular the heads of power of the Commonwealth, in such a way that a decision like this was possible.

In 1997, when in the Hammond case the High Court did a lot of what I would describe as damage and profoundly changed the federal financial relations of this Commonwealth, there was legislation ready to go. There was legislation that was announced particularly quickly. There was legislation that, as I understand it, was quickly enacted with genuine consultation with the opposition at the time. In this case, I think it is fair to say that that consultation has been lacking. I think that is a disappointment, because, when it comes to issues of providing certainty for those in receipt of Commonwealth funds, when it comes to providing certainty for members of the Australian community who might depend on particular programs, or indeed when it comes to people overseas, I think this parliament has shown a genuine willingness to act as one and to provide a means by which certainty within the law can be provided.

But in this case what we have is a piece of legislation that seems to assert that what the High Court said was questionable is no longer questionable. In schedule 2 attached to this bill there are very broad-brush descriptions of what the Commonwealth claims are programs which are now valid by virtue of this bill. I would like to draw the attention of the chamber to one of them—that is, 412.002, titled 'Payments to International Organisations':

Objective: To advance Australia’s foreign, trade, economic, and security interests through membership and participation in international organisations and their various peacekeeping activities .

That is a particularly broad-brush description of a program—if it indeed would qualify as such. In fact, the way I read it, it is a more a grab-bag of various payments to various organisations for various objectives, which the government has attempted to put under the broad program objective of advancing Australia's foreign trade, economic and security interests.

One of the worst things we could do in this place would be to not deliver the certainty that is required, to put through legislation without sustained debate or inquiry, which is what the government has asked with respect to this, and to not actually address the issue of certainty but merely lead to further litigation. That is one reason why the opposition is moving the amendment it has outlined; an amendment which, I note, was negated by members of the government and their allies in the lower house yesterday.

The opposition does not accept the advice provided by the minister for finance that the ability to enter into contracts would be limited by the provision of the sunset clause. I put to members of the government that actually the sunset clause serves to provide greater certainty, because it will make sure that there is a more detailed consideration by this parliament in both chambers, with their two distinct constitutional roles, to examine the impact of both the Pape and the Williams cases.

It seems to me that the piece of legislation we have before us from the government is a very brave one because, while there were varying judgments last week, the point of this bill seems to be to legitimise, through an assertion of an act of this parliament, that we have met the criteria, stated by various justices, that the Commonwealth executive needs to have an act upon which to base an appropriation—more than simply the appropriation act and a contract entered into by the Commonwealth.

This bill does not do anything to address the potential uncertainty, in the opinion of some—I know my colleague Senator Brandis has mentioned those in his contribution earlier today—that these appropriations need to be linked to a particular head of power. I do not think anyone in this chamber or anyone on behalf of the government could assert that that opinion is not valid. I am not asserting that it is necessarily the case; I am simply saying that it is something that should be considered in more detail, and I put to the government that the provision of a sunset clause could bring this legislation back to the parliament so that it could be considered in more depth and so that expert advice could be taken, because these areas are matters for debate.

While the coalition remains a strong supporter of the program it introduced in government—the student chaplaincy program—and I have little doubt that that program could be made quite constitutionally compliant, I sense that this may not be the best way to deal with it. There has been an opinion expressed by some that the High Court decision last week may prove to be a disaster for the Commonwealth. I state no opinion with respect to decisions of the High Court, other than to say the court is there for a reason and needs to be respected as an institution that enforces the written terms of our Constitution as enacted by the Australian people. So politicians or commentators can complain all they want, but in this country the people are sovereign and that is expressed through the Constitution. Limitations upon the executive are, in essence, no bad thing. Limitations upon the executive to require it to have parliamentary appropriation are themselves no bad thing. In fact, civil wars have been fought in countries about such matters. It is one of the founding principles. It was one of the great, most lengthy items of debate at the constitutional conventions leading up to the formation of our nation—the various powers of appropriation, the balance between the two houses and the debate over the ordinary annual services of government clause that has been happening for 110 years. Those debates represent the very essence of what this particular case or series of events are about—that is, the relative balance of power between the executive and parliament in order to serve the needs of the community through appropriations and programs.

I would not like to see a situation where the broad brush strokes of this bill that comprise an assertion of Commonwealth power to appropriate and spend money lead to further uncertainty and litigation. I have been contacted by a number of people of high standing, much more highly trained than me in this area, who are of the view that this bill would not pass muster before the High Court if a similar action were brought. I do not think that is what anyone is seeking to do today. We are seeking to provide certainty.

I would urge the government to very seriously consider the offer, meant in all good faith, by the opposition to insert a sunset clause into this bill to ensure that this parliament at some point has an opportunity for a much more detailed consideration of the impact of these two High Court cases. I have not had a chance to look through all of the programs listed in the regulations in schedule 2 of this bill. That in itself is a problem. But if there are provisions in here that are potentially challengeable because they lack an easily identifiable head of legislative power for this parliament to appropriate funding then I do not see how we are doing the recipients of these programs—or indeed the service providers of these programs—any favour by passing this legislation today.

I stated in my first speech in this place and have written many times that I am a proud federalist. I do not see limitations placed on the activities of this parliament or the executive drawn from this parliament as, by their very nature, a bad thing. We have in this country a limited Commonwealth that was meant to leave a great degree of autonomy not to the states as governments but to the people of the states. It is often said that this is a states' house. It is a term that I have not been comfortable with because it is a house for the people assembled by the states. It is still a people's house but it is people assembled by the communities in a geographic sense, as defined by the states.

I am not one who thinks that the lines of our federation are in any way relevant. The whole point is that we have a federation that provides only limited power to the Commonwealth. The decision last week in the Williams case was a reflection of that. It is a decision that many of our state parliaments would not face. They do not have a written constitution that cannot be amended by the parliament in the way this place does. We should view what happened last week partly as an opportunity to clarify the powers of this Commonwealth and to clarify the powers of the executive and the parliament. If they are more limited than before there is a mechanism to deal with it—a longstanding one—and that is to put that choice to the people. I note that the overwhelming number of those choices have been put by those opposite and the overwhelming number of those have been profoundly and completely rejected by the people, with very few successes. I take that as a signal from the people that they do not want us to gather more power in this parliament—when the highest court in the land limits the power of the executive, which many people have for many years been complaining about, that has an overweening influence on the legislature.

I used to be a tutor in politics. I remember academic treatises would always refer to the overarching power of the executive and how it needed to be constrained. What we had last week was the High Court limiting the power of the executive and simply saying that parliament needs to consider it, that parliament needs to make the decision to appropriate funds. What it potentially has also said, when looked at in the context of the Pape case, is that there may well be limitations on this parliament to appropriate funds. We do not have the clause of the United States constitution which allows us to appropriate and spend for the general welfare of the people. Our founding fathers chose not to put that clause in our constitution, to create a more limited central government.

This particular bill, I fear, will not address all of the problems the government hopes it will address. Indeed, it will not address the problems that the opposition hopes it might address. We agree with the government on the need to provide validation and certainty to recipients of Commonwealth programs, to the service providers that do so much for members of our community. I strongly agree with that—in particular, with the decision made last week on the chaplaincy program, that we provide certainty for students and service providers who deliver and benefit from that program.

There should have been something ready earlier. It should have been provided to the opposition last week. It should be—

Senator Wong: The High Court decision was on Wednesday!

Senator RYAN: I pointed out that in 1997 there were legislative programs in place to deal with bigger decisions, like the Hammond case, where states' franchise fee powers were knocked out and their budgets were shot by the decision of the High Court. It was possible to see this decision coming. It is one of the scenarios the government could have planned for.

I would respectfully suggest to the government that delivering the bill to the opposition yesterday, bringing it into the House of Representatives yesterday, with changes still being undertaken—so the opposition did not have a chance to consider the final bill before debate—and then bringing it to this place today, not allowing time for parliament to fully debate it, will put the very objectives of the bill at risk. We have few more important roles in this place than to oversee the power of the purse. We have very few more important roles in this place than to oversee the balance of power between the executive and the legislature. There may well be different positions between people who think the decision of the High Court between Pape and Williams was a good one and those who think it was a bad one. Regardless of that, we have to live with the decision. That is what the High Court is there for.

I urge the government and the Greens to seriously consider the opposition amendments, which will ensure that this parliament again has an opportunity to consider this issue in more depth, in due course and with a reasonable amount of time, and to provide certainty to those services which, we all agree, are important to the people of the Commonwealth.