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Wednesday, 13 June 1984
Page: 2885

Senator PETER RAE(10.11) — by leave-I move:

That the Bill be now read a second time.

I seek leave to incorporate my second reading speech in Hansard.

Leave granted.

The speech read as follows-

The question of the Senate and Supply has been under consideration by the Australian Constitutional Convention and its Standing Committee 'D' for a number of years. It arises from concern over the possibility that the Senate has, at present, the capacity to force the House of Representatives to an early election without necessarily being required also to face election. Many Australians, including the Liberal and National parties in this Parliament, regard this as a major deficiency. It was at Perth in 1978 that the Convention, after considering competing proposals and a report from Standing Committee 'D', took the first positive step towards reaching a resolution of the matter, when it was decided to recommend that the Constitution be amended to provide for automatic dissolution of the two Houses if the Senate rejected or failed to pass within a certain time an appropriation for the ordinary annual services of the Government . This decision and related matters were referred again to Standing Committee 'D ' for detailed drafting consideration-taking into account the matters raised by delegates during the debate.

Standing Committee 'D' comprised 17 members and, in addition, the Attorney- General, Senator Gareth Evans, and the Shadow Attorney-General, Senator Peter Durack, and myself were members during consideration of the resolution on the Senate and Supply. The Standing Committee was representative of all States, the Northern Territory and the Australian Capital Territory.

Standing Committee 'D' made a number of reports, the most recent being the fourth report-dated 27 August 1982-the recommendations of which were, with an amendment I shall come to, adopted at Adelaide last year. Honourable senators will find the reports, particularly the fourth report which is in two volumes, of great value in their consideration of the proposal now before the Senate.

Let me stress immediately that the Bill faithfully expresses the decisions made by the Australian Constitutional Convention held at Adelaide in April of last year. The governing principle of the Bill is that the Constitution should be altered to provide that, if the Senate within 30 days fails to pass a Bill appropriating revenue or moneys for ordinary annual services of the Government of a particular year only and dealing only with such appropriation, the Governor -General shall forthwith dissolve the Senate and the House of Representatives simultaneously. I submit that such a provision is consistent with the high principle of Westminster style government that a government which has been denied Supply by the Parliament cannot govern and should advise a general election or resign. It is also consistent with the, I think, general opinion that, if the Senate blocks Supply to force an election of the House of Representatives, the Senate, the whole Senate, should also face the judgment of the people.

But, Mr President, what are ordinary annual services of the Government? Clearly , the meaning of the expression is open to differences of opinion. However, Standing Committee 'D' did not spell out what were, or what were not, appropriations for ordinary annual services of the Government. If that position were to remain, there is the danger that any or all appropriations might be classified as appropriations for ordinary annual services, thus not only undermining the Senate's amendment power but also creating possible unreal double dissolution situations where a dispute between the Houses over an appropriation-perhaps minor and unconnected to the mainstream of Supply for ordinary annual services-and which is not resolved within 30 days or less, may lead to a mandatory double dissolution. Such a consequence would be totally unacceptable.

Fully to make my point, Mr President, which I believe is vital to a proper operation of the proposed constitutional changes, I find it necessary to expound the matter of ordinary annual services. The expression 'ordinary annual services of the Government' is employed:

(a) in section 53 of the Constitution to classify the expenditure in respect of which the Senate's powers of amendment are restricted to requesting the House of Representatives to make amendments; and

(b) in section 54 to protect the Senate against the tacking of extraneous matters to an Appropriation Bill for the ordinary annual services of the Government, which the Senate may not amend.

The very first Budget Bills, in 1901, were returned to the House of Representatives by the Senate insisting that the form of presentation be changed to a more appropriate form. Over the years the Senate has been vigilant in ensuring a proper classification of ordinary annual services, thus protecting its amendment power which, I submit, is of even more importance than the veto power. Matters were arranged reasonably well for some 50 years. Then in 1952 the practice of processing the Appropriation (Works and Services) Bill as a Bill not for the ordinary annual services of the Government was challenged, but the Senate confirmed the ruling of the then President that it was a Bill which a Senate may amend. Then in 1964 the Government of the day made a statement announcing that the contents of the Appropriation Bill and the Appropriation ( Works and Services) Bill would be amalgamated, except for some small special expenditure. This announcement led to the appointment by the Government senators of the day of a 'Committee on Appropriation Bills and the ordinary annual services of the Government'. The recommendations of the Committee, which consisted of Senator Cormack, Chairman, and Senators McKellar, Wedgwood and Wright, were largely adopted by the Government and became known as 'The Compact of 1965'.

This was the product of careful consideration and negotiation between the two Houses. In brief, the Compact excluded from the ordinary annual services of the Government appropriations for the construction of public works and buildings, acquisition of sites and buildings, certain plant and equipment, section 96 grants to the States, and new policies not authorised by special legislation. Under the Compact, all such appropriations were to be subject to Senate amendment.

Later, in 1976, the Chairman of the Constitutional and Legal Affairs Committee, Senator Missen, brought up a report stating that, on behalf of the Committee, he had written to the then Treasurer seeking his views as to whether or not the procedure contained in the Compact of 1965 in respect of ordinary annual expenditure would be followed in future appropriation legislation. The Treasurer replied in the affirmative. Arising from the report the Senate resolved in 17 February 1977, on the motion of Senator Missen, to reaffirm the Compact of 1965.

With that history in mind, and supported by an opinion of Mr. Ewart Smith- formerly Deputy Secretary, Attorney-General's Department-who in a paper to Standing Committee D observed that the Compact of 1965 may be seen as approaching the status of a convention, I proposed at the Australian Constitutional Convention, to the motion that the report of Standing Committee ' D' be adopted, an amendment to insert a new section 53A in the Constitution to give statutory recognition to the Compact of 1965, with drafting modifications, and the addition of appropriations for the services of Parliament which under current practice are the subject of a separate Appropriation Bill not deemed to be for the ordinary annual services of the Government. The amendment was agreed to by the Australian Constitutional Convention and this forms clause 3 of the Bill now before the Senate.

There are difficulties in defining what are 'ordinary annual services'. Honourable senators will note that clause 3 approaches the question of classifying appropriations from the point of defining what is not 'ordinary annual services'. This is seen as a more workable approach than attempting to define what is comprised in 'ordinary annual services'.

It is not possible to over-emphasise the need for new section 53A of the Constitution as contained in clause 3 of the Bill. Let me give the Senate an illustration.

Without the amendment, and with a wide-open interpretation by Government of what are 'ordinary annual services', the proposals put forward by the Standing Committee 'D' may have led to a situation where the Senate, in the exercise of its function as a State House, and in attempting to ensure the rectification of an inequity between the States-say, for instance, by amending or rejecting some grant, or form of financial assistance, to one State to the detriment of another , might find itself forced into a double dissolution on the grounds of blocking Supply. That surely would be a strong dissuader to the Senate to act in its proper role in ensuring equity between the States and the Commonwealth. But the dissuader would exist if grants to the States were to be processed as appropriations for ordinary annual services and not in accordance with the amendment contained in new section 53A.

Let us, therefore, entrench in the Constitution this amendment which has at its roots the ensuring of some certainty in the protection of the interests of the States and of the relationships between the houses of this Parliament and the workability of the other proposals for resolving the issue of the Senate and Supply. It will control the content of Appropriation Bills and, furthermore, be of assistance to the Governor-General in determining whether possible grounds for any double dissolution are proper.

It is true that it is proposed by sub-section (4) of proposed new section 54 of the Constitution that within 30 days after assent an appeal may be made to the High Court challenging matter in an Appropriation Bill on the ground that the matter is other than an appropriation for ordinary annual services of a particular year only, and the High Court may declare the matter of no effect. However, the proposed appeal to the court is after the event-that is, after double dissolution is involved. Nevertheless, the provision could prove useful, although with new section 53A the need for the involvement of the High Court should not arise.

From what I have said, I trust that honourable senators will be persuaded of the importance of having defined, at least what are not ordinary annual services of the Government. I see it as crucial to the whole scheme of the Bill. The Senate-and of course the Governor-General-must know where they stand and know what proposed expenditure may be the subject of double dissolution.

I turn now to certain other important features of the Bill. Of much importance are amendments to the second paragraph of section 53-restrictions on Senate's power of amendment of appropriations for ordinary annual services-section 54 (1) -protection against tacking-and proposed new section 54A-providing for double dissolutions-which make it clear that those several provisions apply only to appropriations for a particular year. As the notes contained in the report of Standing Committee 'D' explain, the Senate would be free to reject or amend, without exposing itself to dissolution, any Bill that proposed to make appropriations, in whatever form, covering ordinary annual services for a period of more than one year.

Another important and related matter is that contained in proposed new section 54 (2), which is designed to prevent long term supply for salaries and allowances of public servants, administrative expenses of departments, and Defence pay and allowances. It is provided that any appropriation for such expenditure shall not have effect unless it is made by a law that relates to services of a particular year only and is passed, or is deemed to have been passed, by the Senate not earlier than six months before the commencement of that year. The effect is to prohibit standing appropriations for those classes of ordinary annual expenditure without which it would be virtually impossible for a Government to carry on and prevents possible abuse by a Government obtaining supply for the whole of its term in its first year.

Mr President, I refer now to the proposed amendment to section 57 of the Constitution, which is the existing mechanism for double dissolution when there is disagreement between the Houses. Section 57 is to remain, but it is proposed by the Bill that the section not apply in relation to a proposed law appropriating revenue or moneys for ordinary annual services of the Government of a particular year only and dealing only with such appropriation. However, it is proposed that the one dissolution may be founded on both new section 54A and section 57, circumstances permitting.

Next I draw attention to the, what I believe is, eminently sensible provision in the Bill that the Governor-General in Council may authorise expenditure for a double dissolution election and to maintain 'ordinary annual services' of the Government after dissolution until 21 days after the House of Representatives next meets.

If I have a reservation about the Bill, it is the provision that after dissolution the Appropriation Bill which was the subject of the dissolution may be presented for assent after passing the House of Representatives only, the Senate having no say in the matter. I see this proposal as a downgrading of the Senate in the Federal system and a rejection of the Federal Compact and the States which demanded as the price of federation a States Assembly having equal financial power with the House of Representatives, except for the financial initiative. It follows that the Senate's continued participation in the legislative process following a double dissolution is necessary to uphold the time-honoured Constitutional and Federal principle that Supply is the joint grant of the two Houses. My preference, therefore, in the event of a deadlock after dissolution over Supply is to apply the joint sitting device, as in section 57 of the Constitution. If the Bill is passed at a joint sitting, then that is in accordance with both the spirit and the letter of the Constitution. If, on the other hand, the majority will of a totality of elected members of Parliament be against Supply, then it should be a matter of the whole disagreement and the real decision being sent 'back to the people'. That is in the spirit of the Constitution. That is real democracy.

However, I face the fact that the Bill before the House represents the collective wisdom of the Australian Constitutional Convention and, accordingly, I give way on this point for the sake of the greater good in the Bill.

There is one final matter to which I should refer. This Bill is all about resolving disagreement between the Houses in relation to the blocking of Supply with respect to ordinary annual services. There is, I recognise, a significant area of Supply which is not for 'ordinary annual services'; but, if the Constitutional changes proposed in this Bill are adopted, I do not believe that there will be a problem in respect of Supply for appropriations which are not for the 'ordinarily annual services'. If the Senate is intent on blocking Supply and forcing a double dissolution, the battleground will be on an appropriation Bill for 'ordinary annual services' and there would be no point in blocking a Bill for appropriations other than for 'ordinary annual services'. So far as the latter appropriations are concerned, the Senate's main concern is to have and to retain the power to make any necessary amendment and that objective is achieved by the proposals in the Bill. So, with an understanding of what are and what are not 'ordinary annual services' as proposed in the Bill, any continuing legislative disagreement between the Houses in respect of appropriations not for 'ordinary annual services' may safely be left to the operation of section 57, which is the existing mechanism for resolving disagreement.

Mr President, I conclude as I began by re-stating that this Bill for the resolution of the question of the Senate and Supply faithfully expresses the decisions of the Australian Constitutional Convention. We are much indebted to the Convention and its Standing Committee 'D' for their long and patient deliberation on the matter and for their considered resolution reached at Adelaide in April last year. In the spirit of consensus, which the Government claims to be the prevailing mood of the electorate, let us thank the Australian Constitutional Convention, accept the careful and well considered findings and recommendations, and give this Bill a speedy passage. Let us be seen to be balanced and reasonable.

Mr President, I thank the Senate.

Debate (on motion by Senator Robertson) adjourned.