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Thursday, 17 February 1977


Senator MISSEN (Victoria) - I resume the debate on this motion which relates to a report presented unanimously, by the Senate Standing Committee on Constitutional and Legal Affairs. It is headed: Report on the Ordinary Annual Services of the Government. This report, which was presented in June of last year and upon which debate has not resumed since, arises from an instruction which was given to the Committee on 14 November 1974. It arose then out of complaints which had been made by certain Senate Estimates Committees as to the operations of government financial legislation and the extent to which it was then alleged, as was the case in the previous year, that there were certain deviations from the compact which had been entered into in 1965 and which had been the basis upon which there was a distinction between those Bills which related to the ordinary annual services of the Commonwealth, which under the Constitution the Senate cannot amend, and those which related to other items. The Senate Committee was reconstituted and given its further reference after the last election on 2 March 1976. As I said, it then presented its report in June. In that report and the comments which I made to the Senate on the occasion I presented it, I pointed out in very brief terms the significance of the report and the recommendations which we then made.

I think that I should say a little about the report because it is a long time since it was presented to honourable senators. I hope that tonight the debate on it will continue and will be completed. If at the end of this debate the Senate takes note of the report. I shall move a motion which is contained in the body of the report and which is designed to resolve and repeat what was and is the position with regard to the understanding of the Committee and, I think, the understanding of the Senate as to the Senate's respective powers. The Constitution of this country makes reference to the words 'the ordinary annual services of the Government'. I shall read a small sentence from section 53 of the Constitution which states:

The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government.

A further reference to this same expression is contained in section 54 of the Constitution. It reads:

The proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation.

Over many years there has been some doubt and some dispute as to precisely what is covered by the words 'ordinary annual services of the Government'. The expression is significant in that it determines those matters which the Senate cannot amend and those which it can amend. The High Court has had occasion to discuss this matter- I think this is set out in the report quite simply- and one could say that the Court, particularly in the case of Osborne v. Commonwealth, has pointed out that it is for Parliament to resolve what are the meanings of these expressions and to determine these matters, and not for the courts to endeavour in any way to define the power of the Parliament.

The report traces the history of the expression in more detail. It shows that from the earliest days there was a division between that Bill which covered the ordinary annual services and other

Bills. However, there was some idea by Mr Deakin, the first Attorney-General, that perhaps it would not be necessary to do so. But that continued to be the case until a problem arose in 1964 when Mr Holt's Budget of that year amalgamated certain Bills and in fact reduced the amounts in the amendable Bills from $70m to Sim- a very substantial change. It was the cause of complaint and resulted in the appointment of a Senate Government members committee under the chairmanship of Senator Sir Magnus Cormack. That committee investigated the background of the matter and reported on what ought to be the differentiation between these particular powers. Although the report of that committee of government senators was not tabled in the Parliament until 1967, it was made available at an earlier date. It resulted in a statement being made by Mr Holt, who was then Treasurer. I think that statement is generally known as the 1965 compact. The then Treasurer made clear what matters would and would not be considered within the framework of 'ordinary annual services'. For those honourable senators who do not have a copy of the report before them, page 11 states that Mr Holt's words are recorded in the May 1965 Hansard at pages 1484-5. He said: the Government has now decided that henceforth there will be a separate Bill . . . subject to amendment by the Senate, containing appropriations for expenditure on -

(a)   the construction of public works and buildings;

(b)   the acquisition of sites and buildings;

(c)   items of plant and equipment which are clearly definable as capital expenditure;

(d)   grants to the States under section 96 of the Constitution; and

(e)   new policies not authorised by special legislation. Subsequent appropriations for such items will be included in the Appropriations Bill not subject to amendment by the Senate.

The position then was that that compact continued to be observed and those particular items were in the Bill which could be amended until, as I mentioned, 1973 and 1974 when Senate Estimates Committees in each year raised objections. The objections came under paragraph (e) which I have read out- new policies not authorised by special legislation. A number of complaints are detailed in the report. It was suggested that these items were wrongly placed in the Bill; that they did not have special legislation applicable to them; and that this was depriving the Senate of the opportunity to amend the Bills in respect of such items. Having reviewed this aspect of the matter, the Senate Committee, in paragraph 25 of its report, stated:

It is the opinion of this committee that the 196S Compact, considered in the light of the Government Senators Report upon which it was based, does not lend itself to an interpretation that a Government can place any financing for new policies in a non-amendable Bill purely on the basis that the required legislation would be forthcoming at a later date.

The argument was advanced by Ministers that somehow this brought it outside the aspect of new policies. The Senate Committee was certainly satisfied that it did not do so. In the course of the consideration given by the Senate Committee to this matter- not just in relation to new policies but in relation to the application of the whole 1965 compact- there was correspondence between this Committee and the Treasurer (Mr Lynch). On 8 April last year, as chairman of the Committee I wrote to the Treasurer, the Hon. P. R. Lynch, seeking his views as to whether or not the procedure announced by Mr Holt in 1965 in respect of ordinary annual expenditure would be followed in future appropriation legislation. That letter is set out in the appendix to the report. I think the reply which the Treasurer wrote to me is significant and should be read. The reply is dated 4 May 1 976 and reads:

I refer to your letter of 8 April 1976 in which you sought my views on whether or not the procedure announced by the Treasurer in 1965 in respect of ordinary annual expenditure will be followed in future appropriation legislation.

I am aware of the terms of the 1 965 compact and confirm that there is no present intention of seeking a change in its terms, i.e. we propose to follow it in the preparation of future appropriation legislation.

The Committee recommends that in view of the Treasurer's letter, the Senate should accept the assurance given, that the 1965 compact will continue to operate. The second matter which was referred to the Committee for consideration and report to the Senate was the means by which the constitutional rights of the Senate to amend proposed laws appropriating revenue or moneys for expenditure on matters other than the ordinary annual services of the Government should be preserved. The Committee was of the opinion that the clear statement contained in the Treasurer's letter was, in the first place, an indication that the procedure was to be preserved. In general, the Committee's first conclusion, as we see on page 14 of the report, related to the future observance of the procedure. The Committee recommended:

That the Senate continue to be vigilant in scrutinising all Appropriation Bills so as to ensure that Appropriation Bills for the ordinary annual services of the Government only contain appropriations for those services.

There is nothing particularly extraordinary about that. I suppose this continued vigilance is always the duty of this Senate in many other things and should particularly be seen to be applied in this area to ensure that there are not accidental or otherwise departures from the 1965 compact.

Turning to another section of the report, I refer to the resolution that the Committee recommends the Senate should reaffirm. This provides that the 1965 compact should continue. I propose when this debate has concluded to seek leave to move this motion to enable that compact to be continued. The motion is in these terms:

The Senate resolves:

1.   To reaffirm its constitutional right to amend proposed laws appropriating revenue or moneys for expenditure on all matters not involving the ordinary annual services of the Government.

2.   That appropriations for expenditure on:

(a)   The construction of public works and buildings;

(   b ) the acquisition of sites and buildings;

(c)   items of plant and equipment which are clearly definable as capital expenditure;

(d)   grants to the States under Section 96 of the Constitution; and

(e)   new policies not previously authorised by special legislation; are not appropriations for the ordinary annual services of the government and that proposed laws for the appropriation of revenue or moneys for expenditure on the said matters shall be presented to the Senate in a separate Appropriation Bill subject to amendment by the Senate.

As I indicated, I propose to seek leave subsequently to move a motion in those terms. In conclusion may I say that I hope that the report of the Committee will be of assistance and that it will be a record in short form of the history of this matter and further that it will help towards the preservation of what seems to be a highly desirable compact reached by a government in earlier days. Subject to that, I do not propose to say anything further,







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