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Minor parties, major players? The Senate, the minor parties and the 1993 Budget



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Minor Parties ... Major Players? The Senate, the Minor Parties and the 1993 Budget

Dr Liz Young 1996Australian Parliamentary Fellow

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Department of the Parliamentary Library

Minor Parties.. .Major Players?

The Senate, the Minor Parties and the 1993 Budget

Dr Liz Young

1996 Australian Parliamentary Fellow

Australian Government Publishing Service Canberra

ISBN 0644 49588X

© Commonwealth of Australia 1997

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction and rights should be addressed to the Manager, Commonwealth Information

Services, Australian Government Publishing Service, GPO Box 84 ACT 2601.

Minor Parties... Major Players? The Senate, the Minor Parties and the 1993 Budget

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that it is accurate and balanced, the paper is written using information publicly available at the time of production. The

views expressed are those of the author and should not be attributed to the Information and Research Services (IRS) or to the Department of the Parliamentary Library. Readers are reminded that the paper is not an official parliamentary or Australian government document. IRS staff are available to discuss the paper's contents with Senators and Members and their staff but not with members of the public.

Produced by the Australian Government Publishing Service

Presiding Officers' Foreword

The Commonwealth Parliament has funded annual Parliamentary Fellowships since 1971, usually for young scholars who will take back to their universities a practical appreciation of aspects of the Parliament.

The Fellows work in the Department of the Parliamentary Library (DPL) which gives them access to an extensive range of resource material and the unique opportunity to experience the parliamentary environment first hand. Each Fellowship is in two parts, six months for a research project and

six months working in the Information and Research Services program responding to research requests from Senators and Members.

In 1996, for the first time, two Fellows were appointed and this publication is the result of the work of one Fellow, Dr Liz Young.

Dr Young evaluated the role of the minor parties in the Senate, an issue which affects the whole parliamentary process quite significantly. Dr Young assesses the various ways that non-governing majorities in the Senate have

challenged the government's prerogative in the legislative process and the

implications of this action for the Australian federal legislature.

BOB HALVERSON Speaker of the House of Representatives

September 1997

`. RGARET REID President of the Senate

in

Contents

Presiding Officers' Foreword iii

Abbreviations xi

Acknowledgments xiii

Introduction xv

Chapter 1 Awakening the 'House of the Living Dead': The Evolving Nature of the Senate 1

Introduction 1

Federalism Versus Responsible Government: The Context of Senate Power 2

The Senate's Popular Legitimacy 6

Party Representation in the Senate 12

Characterising Senate Resistance to Executive Power 15

Obstructionism, Review and Policy Initiation 16

Conclusion 19

Endnotes 19

Chapter 2 Non-Governing Majorities in the Senate: A Historical Overview 1910-1992 21

Introduction 21

Opposition Majorities 22

Minor Parties in the Senate 24

Conclusion 35

Endnotes 36

Chapter 3 The 1993 Budget: Setting the Scene 37

Introduction 37

Minor Party Representation in the Senate: 1993 38

Setting the Scene 39

Negotiating for Change in the 1993 Budget 44

The Democrats 44

The Greens 47

v

Contents

Conclusion 51

Endnotes 52

Chapter 4 Analysing the 1993 Budget 53

Introduction .53

Major Party Initiated Motions 54

Minor Party Initiated Motions 57

Minor Party Responses to Executive Power within the Legislative Process 60

Conclusion 62

Endnotes 63

Chapter 5 The Sales Tax Bills 65

Introduction 65

Sales Tax (Customs) (Deficit Reduction) Bill 1993, Sales Tax (Excise) (Deficit Reduction) Bill 1993, Sales Tax (General) (Deficit Reduction) Bill 1993 65

The Democrats 67

The Greens 74

Conclusion 82

Endnotes 83

Chapter 6 Other Forms of Challenging Executive Power: Legislative . Review and Symbolic Challenges 85

Introduction 85

Legislative Review 85

Minor Party Initiated Motions: A Symbolic Challenge to Executive Power 97

Conclusion 99

Endnotes 99

Chapter 7 Conclusion 101

The Capacity of the Minor Parties in the 1993 Budget Conflict 102

The Type and Intensity of Minor Party Challenges to Executive Power in the 1993 Budget Conflict 107

vi

Contents

Persistence

Frequency 113

In Summary 113

Endnotes 114

List of Appendixes

Appendix 1: A Chronology of the 1993 Budget 115

Appendix 2: Budget Bills: A Detailed Chronology 119

Appendix 3: Public Opinion and the 1993 Budget 127

Appendix 4: Senate Election Results: 1910-1996 129

Appendix 5: Data Relating to the Breakdown of Motion Types in Senate Dealings with the 1993 Budget Bills 131

List of Tables

Table 1.1 Levels of Major Party Support Compared to Levels of Representation in the Senate 8

Table 1.2 Opinion Polls Responses to the Question: Should the Senate be Retained 1958-1979 10

Table 1.3 Senate and House of Representative Majorities in 1910-1948 13

Table 2.1 Scenarios of Minor Party Power 25

Table 2.2 Combinations of Minor Party Representation: 1961-75 26

Table 2.3 The Australian Democrats: Holding the Balance of Power:

1981-1990 30

Table 3.1 Total Senate Numbers in 1981-1993 38

Table 3.2 Matrix of Possible Senate Voting Pattern: 1993 39

Table 3.3 Summary of Budget Measures 41

Table 3.4 Australian Democrats Position in the Budget Negotiations and the Budget Mark II 45

Table 3.5 Green (WA) Inc Proposed Changes to the Budget 48

Table 4.1 Motions Initiated by Major Parties and Levels of Success 54

Table 4.2 Party Support for Major Party Initiated Motions 55

Table 4.3 Party Support for Minor Party Initiated Motions 57

vii

Contents

Table 4.4 Motions Initiated by Minor Parties 58

Table 4.5 Level of Congruence between Senate Representation, Motions and Success in the Legislative Process 59

Table 4.6 Minor Party Responses to Executive Power within the Legislative Process 61

Table 5.1 The Sales Tax Bills: A Chronology 66

Table 5.2 Levels of Minor Party Support in the Senate: 1990-1993 71

Table 5.3 Australian Democrats Response to Executive Power within the Legislative Process 74

Table 5.4 Budget Compromise 2 79

Table 5.5 Green (WA) Inc Response to Executive Power within the Legislative Process 81

Table 6.1 The Excise Tariff Bill: A Chronology 92

Table 6.2 The Customs Tariff Bill: A Chronology 95

Table 7.1 Combinations able to Defeat the Executive in the 1993 Budget and Examples 106

Table 7.2 Challenges to Executive Power in the Senate: the 1993 Budget 109

Table A3.1 AAGB McNair Poll, 31 August 1993 127

Table A3.2 Saulwick Poll, 4 September 1993 127

Table A3.3 Saulwick Poll, 7 September 1993 128

Table A3.4 Newspoll Conducted 17 September 1993 128

Table A5.1 Party Support for ALP Initiated Actions 131

Table A5.2 Party Support for Coalition Initiated Motions 132

Table A5.3 Party Support for Australian Democrat Initiated Motions 133

Table A5.4 Party Support for Green (WA) Inc Initiated Motions 134

Table A5.5 Party Support for Harradine (IND) Initiated Motions 134

Table A5.6 Motions Initiated by Parties and Levels of Success (by motions type) 135

List of Figures

Figure 1.1: Difference Between Levels of Support for the Major Parties in Senate Elections and Seats Won (%) 9

viii

Contents

Figure 1.2 Opinion Polls Responses to the Question: Should the Senate

be Retained 1951-1979 10

Figure 4.1 Motions Initiated by Parties and Levels of Success 54

Figure 4.2 Party Support for Major Party Initiated Motions (no.) in Divisions 56

Figure 4.3 Party Support for Major Party Initiated Motions (%) in Divisions 56

Figure 4.4 Level of Congruence between Senate Representation, Activities and Success in the Legislative Process 60

Figure 4.5 Minor Party Response to Executive Power within the Legislative Process 61

Figure 4.6 Minor Party Response to Executive Power within the Legislative Process 62

Figure 7.1 Factors Influencing the Strategies Available to Minor Parties in the Senate 104

Figure A5.1 Levels of Minor Party Support for ALP Initiated Motions 132

Figure A5.2 Levels of Minor Party Support for Coalition Initiated Motions 133

Figure A5.3 Levels of Party Support for Democrat Initiated Motions 134

Figure A5.5 Motions Initiated by Parties by Type 135

Figure A5.6 Successful Actions Initiated by Parties by Type 136

ix

Abbreviations

ACTU Australian Council of Trade Unions AD Australian Democrats

ALP Australian Labor Party

COAL Coalition

CON Conservative parties

CP Australian Country Party

DLP Democratic Labor Party of Australia

GWA The Greens (WA) Inc

IND Independent

LIB Liberal Party of Australia

LM Liberal Movement

NDP Nuclear Disarmament Party

NPA National Party of Australia

xi

Acknowledgments

There have been numerous people that have contributed to this monograph in one way or another. I would like to offer a special thanks to John Warhurst who has given me support and advice at every stage of writing the monograph. I am also grateful to John Uhr whose input has proved invaluable, Pat Weller who proof read the manuscript, Terry Wood, who assisted in collating data from Hansard debates and Gerry Newman for giving me assistance in evaluating the nature of the Senate's electoral system.

My time in the Parliamentary Research Service was a unique opportunity to experience Australia's federal parliament first hand. For this I am greatly indebted, not only for the resources and support structure to write the monograph, but also the time I spent doing client work as a member of the Research Service. I would especially like to thank the Head of the Research Service, Dr June Verrier, for giving me this opportunity and to Gerry Newman, Greg Baker, Stephen Barber, Tony Kryger, Andrew Kopras, Jan Pearson and Bob Bennett, who helped to establish an enjoyable working environment. I would also like to extend my thanks to Judy Hutchinson and Kate Matthews who played a crucial role in coordinating efforts to complete the monograph and Maryanne Lawless and Sandra Bailey, for their hard work in formatting the text and Martin Lumb and Geoff Winter for their editing work.

1996 was an unusual year with two Parliamentary Fellowships awarded. I would like to thank Gianni Zappala, the other Fellow, for the endless debates we had about the nature of Australia's parliament. I am sure that these discussions added a depth and rigour to the monograph that might have otherwise been lacking.

Numerous Senators, Members and their parliamentary staff assisted in the writing of the monograph through interviews, discussions and the provision of research material. These played a crucial role in filling out much of the detail of the events surrounding the 1993 Budget. I would like to express my appreciation to all of those who participated in the study as they were often generous with their time in the midst of their extremely hectic parliamentary week.

xiii

Introduction

As the final draft of this monograph was prepared, leader of the Australian Democrats, Cheryl Kernot, stunned the nation by announcing her resignation from the party and her intention of joining the Labor Party.

Kernot's explanation for this move was that she wanted to play a more central role in shaping the nation's policy direction. Such a role, she claimed, demands access to governmental power, something not available to the minor parties as they wield the balance of power.

The dilemma faced by Kernot reflects many of the findings of this monograph. While the presence of the minor parties undoubtedly enhances the capacity of parliament to operate as a check on the executive and bring new ideas into parliamentary debates, this is a limited role. Minor parties, when holding the balance of power, are responding to an agenda set by disputes between the major parties. They may bring new issues onto the political agenda and have them debated, but to move beyond this position and to see those ideas become entrenched in policy, requires the agreement of the government of the day. Thus, as the title of the monograph suggests, the notion that minor parties can become major players in the Australian parliament is open to question. Minor party involvement in the 1993 Budget highlights the potential and the limitations of their parliamentary

significance. It allowed for intense scrutiny of a highly problematic Budget and resulted in the government making changes that ameliorated its harsher effects on low income earners. At the same time, there were significant limits to the policy areas that the minor parties were able to negotiate to change. It was the minor parties' ability to review the Budget legislation that consequently came to the fore. The purpose of this study is to broaden the analytical tools that may be used in evaluating the behaviour of the minor parties in this, and other instances, and in doing so, identify the strengths and weaknesses of their position within Australia's federal parliamentary system.

Conflict over the 1993 Budget stands out as a significant event in the Senate's efforts to flex its muscles and assert its independence. As the Greens, the Democrats and Independent Brian Harradine negotiated with

xv

Introduction

the government over the budget bills, the Senate was thrown into the

spotlight as a significant arena of politics, one in which the minor parties

were playing a critical role in shaping legislative processes and policy

outcomes. This event was to take the government by surprise, but scholars

of Australian politics had been equally slow in identifying the re-emergence

of the Senate as an important political institution. For many years the

decline of parliament thesis had dominated our approach to the operation of

the Australian federal parliament. As late as 1994 Rodney Smith began a

chapter on the Australian parliament in the following way:

The inclusion of a chapter on Parliament in a book devoted to developments in Australian politics will seem odd to readers of the

literature on Australian parliaments—a literature that is overwhelmingly negative and pessimistic. Regardless of when during the last thirty years an author is writing, the message is the same:

Parliament is in decline, it runs, while executive dominance increases.

This process is constant and probably irreversible. Parliament is but a 'rubber stamp' or 'sausage machine' irrelevant to the real power processes of Australian politics, because it is subordinate to party discipline, the executive, or ruling class power. All aspects of the institution—legislative and debating functions, question time, the presiding officers, accountability, language and behaviour—are decaying.

The Westminster system of responsible government has failed in Australia. Reform is desirable, but—to complete the pessimistic cycle— reform is virtually impossible because of the power of parties and the difficulty of constitutional amendment. According to this dominant view,

then, Parliament has not 'developed' in significant ways and is not likely

to (Smith, 1994, p. 106).

The decline of parliament thesis, described by Smith, assumes an impotent

Senate, one incapable of acting as a check on the executive. Smith's chapter

set its sights on challenging this paradigm by pointing to recent changes in

the functioning of parliament:

Recently, however, parliamentary politics has become more open-ended.

Governments have been unable to secure majorities in upper houses, and, in some cases, lower ones. Weakening party loyalties within the electorate mean that this situation is likely to persist. ..(Smith, 1994, p.

106).

xvi

Introduction

Smith's approach is interesting because it neatly encapsulates a number of themes critical to this monograph. First, he identifies the increasingly

important role the Senate is playing within Australia's parliamentary

system. Second, he highlights the role played by the minor parties within

this process of institutional reform. This argument reflects a wider change

in academic attitudes towards the Senate in recent years, as the following

statement by Hugh Emy makes evident:

In 1975, it is probable that a majority of political scientists saw [the Senate] as the interloper, disrupting a relatively cohesive system. If so, that majority has very likely gone. In 1995, the Senate is more likely to be seen as a centrepiece in Australia's evolving constitutional structure (Emy, 1995, p. 27).

As Emy suggests, this shift has made a marked impact on the character of current debate regarding the Senate. In particular, it has generated

interest in the potential that the minor parties have for enhancing

democratic processes through their activity in the Senate, especially in

facilitating the Senate's review functions. At the same time it has raised

questions about the extent to which a government's political agenda can, or

should, be altered in the Senate. These themes are central concerns of this

monograph.

The conflict over the 1993 Budget directed attention to both the Senate and

the minor parties. It has become commonplace to argue that this political

event either ushered in a new phase of Senate behaviour, or epitomised

emerging characteristics of the Senate. The following assertion by Richard

Mulgan is typical of this trend:

The role of the Senate became a major political issue during the period of renewed Senate activism after the federal election of March 1993, including, most notably, the opposition parties' refusal to pass the 1993 budget unamended (Mulgan, 1995, p. 193).

Uhr makes a similar point in a different way:

Senate behaviour since the 1993 elections has involved unprecedented modification of government policy strategies, as now both government and opposition parties have to negotiate and trade their way with minor

powers simply to block one another. The best illustration of the new

xvii

Introduction

world of multi-party government is the amendment of the budget proposals for 1993 and 1994...(Uhr, 1995, p. 129).

In spite of the notoriety of the 1993 Budget there has been no detailed

analysis of these events. Undertaking the most comprehensive analysis to date is Robert Jackson's paper 'Foreign Models and Aussie Rules:

Executive-Legislative Relations in Australia'. Yet even this provides little more than a passing reference to the 1993 Budget (Jackson, 1995). The importance associated with the 1993 Budget conflict and the limited detailed analysis of these events provide the rationale for this monograph's focus.

The first chapter sketches out the evolving character of the Senate and develops an argument for why this chamber has become increasingly important in Australian political life. It highlights the role of minor parties in this process and through the concepts of obstructionism, review and policy initiation, discusses different ways that non-governing majorities may challenge executive power. Chapter two takes a look at the way non-

governing majorities in the Senate have behaved. It argues that the adversarial character of the relationship between the major parties in Australia has meant that opposition majorities have adopted obstructionist tactics while there has been greater variety in the approaches of the minor parties.

Chapters three through to six evaluate various aspects of the 1993 Budget conflict. The theme emphasised throughout is the approach and objectives of the minor parties. By minor parties this monograph is specifically referring to the Greens and the Democrats. With the need to contain the breadth of the study, the activities of Independent Brian Harradine have

not been the focus of detailed study. The conclusion draws the case study material together by identifying five components required to characterise minor party behaviour in the Senate.

xviii

Chapter 1: Awakening the 'House of the Living

Dead': The Evolving Nature of the Senate

Introduction

There was a time when the Senate was considered to be insignificant in Australia's parliamentary processes, so much so that it was referred to as

the house of the living dead (Kernot, C. 1993h).' Times have changed and

the Senate now features as a crucial parliamentary institution. This

chapter begins by tracing the evolution of the Senate and in doing so it

seeks to explain why it has come to assume increasing importance. Its

starting point is the conceptual framework developed by Arendt Lijphart

(1987) who argues that:

The extent to which a second chamber plays a significant role in a country's political life depends largely on two factors: its power relative to those in the first chamber, and its composition compared with that of the first chamber, that is, whether it is selected on the same or on a different basis (Lijphart, 1987, p. 102).

The chapter explores Lijphart's framework and concludes that while his

approach explains much about the increasing power of the Senate, it is

1

The Senate, the Minor Parties and the 1993 Budget

limited in so far as it does not provide the necessary tools to characterise

the various forms the use of this power takes or the particular role played by minor parties in the Senate.

Federalism Versus Responsible Government: The Context

of Senate Power

In discussing the relationship between upper and lower houses in bicameral systems Lijphart establishes a continuum. At one extreme there. are those systems where power is equally distributed between the two houses of parliament, and at the other, there are parliamentary systems where the upper house is far less powerful. The US Senate is a good example of the former and the British House of Lords the latter.' Lijphart places Australia somewhere in between these two extremes as an example of a moderately powerful upper house. 3 He continues by arguing that what determines the distribution of power between the two houses in a bicameral system is:

the formal powers bestowed upon them by the Constitution and fundamental constitutional conventions and on the degree of democratic legitimacy of the second chamber (Lijphart, 1987, p. 102-3).

Lijphart's approach is a good starting point for understanding the Senate's institutional power. It highlights the role played by the Australian Constitution and constitutional conventions in shaping the relative power of the House of Representatives and the Senate within the parliamentary system. In particular, it draws attention to the way that the federal character of the Constitution and the convention of responsible government have been crucial in establishing this relationship. Associated with federalism is a situation in which the two houses of parliament enjoy official powers that are near to equal while responsible government has ultimately left the House of Representatives as the location of government, with the greater power of the two chambers.

Federalism is based on the belief that government power should be dispersed to ensure that individual rights are protected (Sharman, 1990, p. 83). It is, as Galligan explains, a:

2

Awakening the 'House of the Living Dead': the Evolving Nature of the Senate

negative view of breaking up popular majorities and restricting popular

government through checks and balances... Federalism enshrines complicated procedures and conflicting institutions within the democratic process in order to refine and restrict the majority will

(Galligan, 1995, p. 48).'

In writing the Constitution, federal principles were of considerable

i mportance (Galligan, 1995, ch. 3; Uhr, 1995, p. 133-135). Yet even more

significant was the problem of finding ways to entice the smaller states into

the new Australian state. Within the Constitution, the design of the federal

compact sought to ensure the protection of the smaller states from the more

populous states of New South Wales and Victoria. First, it gave the states

responsibility for the day to day governing of citizens' lives through the

division of power. Second, it provided for a minimum representation of five

seats in the House of Representatives for each of the founding states. Third,

and more importantly in this context, it created the Senate. The

Constitution maintained the interests of the smaller states by guaranteeing

their equal representation within the Senate and thus providing them with

a significant voice in a national parliament. To operate as an effective

institution of federalism it was necessary to give the Senate powers

significant enough to act as a check on the House of Representatives,

otherwise its presence would have been meaningless. The result was a

Constitution that gave the Senate virtually co-equal powers with the House

of Representatives.

The federal element of the Constitution saw the establishment of a powerful

Senate, yet it was not without limitation. This primarily stems from the

principle of responsible government and one of its central tenets, that the

party with a majority of seats in the lower house forms government. In

Australia this meant that the House of Representatives was considered to

be the house of government while the Senate was not. The influence of this

convention is clearly evident in the Constitution where s. 53 limits the

Senate's control over the budget by prohibiting it from the power to

appropriate revenue, to impose taxation, or to amend this sort of legislation.

The importance of this aspect of the Constitution cannot be understated. As

Uhr explains:

3

The Senate, the Minor Parties and the 1993 Budget

For Westminster-derived parliamentary systems, budget bills are

symbolically the most important of all legislative business. There is no greater authority which a government can enjoy than its ability to apply its voting power to the annual budget in order to stamp its mark on policy and the legislative process (Uhr, 1997a, p. 2).

When . the founders wrote the Constitution they had this firmly in their minds (Galligan, 1995, p. 75-81). Their intent, in keeping with the principle of responsible government, was to link powers associated with governing to the House of Representatives. Nevertheless, they did not completely strip the Senate of any power over the budget, allowing it to request the House of

Representatives to make amendments to budget bills. The Constitution also gave the Senate the power to wield the ultimate sanction and block budget bills. In giving the Senate the power to block supply, the Constitution provided the upper house with an extremely powerful tool, one capable of forcing a government to an election by refusing the finances it requires to govern the nation (Emy and Hughes, 1991, p. 336). 5 In addition, the ability to request amendments places the Senate in a position where it may initiate substantive alterations to a government's budget. These powers that led one government leader in the Senate to state:

We are talking not about any old upper house but the most powerful upper house constitutionally in the Westminster world. There are no ifs, buts or maybes about that (cited in Uhr, 1997a, p. 6).

Even so, these powers do not make the Senate more powerful than the House of Representatives or even equal in power. Ultimately it is from the House of Representatives that the budget must originate and the core functions of government remain squarely with this chamber.

Further reinforcing the primacy of the House of Representatives is the Constitution's nexus provision (s._ 24) which ensures that the House of Representatives has as near as practicable to twice as many Members as Senators. This provision only becomes important when there has been a dispute between the two houses, one that leads to a double dissolution election, followed by a joint sitting of parliament. The reason why the nexus provision remains important in principle and parliamentary practice is because it ensures that when there are unresolved disputes between the

4

Awakening the 'House of the Living Dead': the Evolving Nature of the Senate

Senate and the House of Representatives, the size of the latter means its

will is more likely to prevail.6

The relationship between responsible government and federalism and its impact on the Australian parliamentary system has been the focus of considerable debate among scholars since the dismissal of the Whitlam government in 1975. As Emy and Hughes explain, this event made evident the potential for '...the conventions of responsible government [to conflict] with the powers given to both the Senate and the Governor-General in the

Constitution.' (Emy and Hughes, 1991, p. 336). The source of this tension is the incompatibility between federalism, which saw the creation of a powerful Senate, and notions of responsible government that seek to concentrate governmental power in the House of Representatives. The point to be made here is that regardless of this tension, the pre-eminence of the

House of Representatives remains intact. No-one seriously assumes that the Senate should be the location of government. Instead, conflict arises around the periphery with disputes over the extent to which non-governing parties in the Senate can, or should, influence the government's agenda.

Thus, as a recent article by Richard Mulgan points out:

All sides therefore appear to recognise that the Senate's review function involves scrutiny of government within limits set by respect for the government's mandate and its right to govern based on its majority in the lower house. Disagreements arise, however, on the issue of where these limits are set (Mulgan, 1996, p. 196).

In a similar vein, Galligan has gone so far as to describe the Senate as

containing 'awesome constitutional powers' that have yet to be realised (Galligan, 1995, p. 63). The full realisation of the Senate's power, however, does not enter the terrain of government, rather it involves the Senate operating as

a national parliamentary institution with multiple purposes of governance. These include representation of more diverse strands of the national interest and reviewing government legislation (Galligan, 1995, p. 89).

The fact that both responsible government and federalism are the principles

upon which the Australian parliamentary system operates supports

5

The Senate, the Minor Parties and the 1993 Budget

Lijphart's claim that the Australian upper house is moderately powerful.

Responsible government ensures that the House of Representatives continues to be viewed as the house of government and has the upper hand in disputes with the Senate. Nevertheless, the federal component of the Constitution, which establishes a Senate with virtually equal powers to the House of Representatives, operates to limit the power of the lower house, but not in such a way as to threaten its role as the primary location of

government.

The Senate's Popular Legitimacy

Lijphart argues that influencing the power relationship between two houses of parliament in a bicameral system is the popular legitimacy of upper houses: The actual political significance of second chambers depends not only on

their formal constitutional powers but also—and even more—on the degree of democratic legitimacy conferred by their method of selection (Lijphart, 1987, p. 103).

The experience of the Australian Senate supports Lijphart's claim. It will be argued that partially defining the Senate's power is its democratic legitimacy that has increased since the adoption of proportional representation in 1948. The nature of this power reinforces the claim that the Australian Senate is a moderately powerful upper house.

To the extent that Senators have been popularly elected since Federation, the Senate has always enjoyed a degree of democratic legitimacy.

Nevertheless, the nature of the two voting systems used in the Senate between 1902 and 1948 raised questions about its representative qualities.

From 1902 until 1919, the use of first past the post voting in multi-member electorates in the Senate led to the election of the candidates with the highest number of votes (a simple majority). In 1919 the Electoral Act was

amended and preferential voting introduced. This system required candidates to win an absolute majority (50 per cent plus 1) to secure a seat.

If no candidate won a majority after the first count, preferences were distributed until one candidate won a majority. In both systems, the political parties encouraged voters to follow a party ticket and a form of

6

Awakening the 'House of the Living Dead': the Evolving Nature of the Senate

block voting occurred where a typical voter supported three (or six in a full

Senate election) candidates from the same party. This meant that the candidate of the party that won the first seat in a particular state would usually win all of the seats in that state. The outcome was an

unrepresentative and undemocratic chamber with the party of government frequently winning exaggerated majorities. ? As table 1.1 and figure 1.1 illustrate, this left the major parties highly over-represented or under-represented for most of the period from 1910-1948. It is reasonable to assume that the unrepresentative nature of the Senate, prior to 1948, left it lacking in democratic and popular legitimacy.

In 1948 the Senate underwent a profound change as a result of proportional representation being introduced. Systems of proportional representation allocate seats according to a candidate's (or party's) ability to win a certain proportion (a quota) of the vote. The objective that underlies proportional representation is to ensure that parliamentary representation approximates the percentage of votes won by a party. Thus if a party wins

20 per cent of the vote, then it should win about 20 per cent of the available seats. The introduction of proportional representation into the Senate in 1948 had the expected effect of bringing about a more even distribution of party representation in the Senate, one that more clearly reflected party

support in Senate elections. The result was the dramatic drop in levels of major party over- or under-representation following the 1949 election. See table 1.1 and figure 1.1.

7

The Senate, the Minor Parties and the

1993 Budget

Table 1.1: Levels of Major Party Support Compared to Levels of

Representation in the Senate8

Election

% votes CON/COAL % of seats Difference % votes

ALP

% of seats Difference

1910 46 0 -46 50 100 50

1913 49 39 -10 49 61 12

1914 48 14 -34 52 86 34

1917 55 100 45 44 0 -44

1919 55 95 40 43 5 -38

1922 42 44 2 46 61 15

1925 55 100 45 45 0 -45

1928 50 63 13 49 37 -12

1931 55 83 28 41 17 -25

1934 53 100 47 41 0 -41

1937 47 16 -31 48 84 36

1940 50 84 34 47 16 -31

1943 39 0 -39 55 100 45

1946 43 16 -28 52 84 32

1949 50 55 4 45 45 0

1951 50 53 4 46 47 1

1953 44 47 2 51 53 3

1955 49 57 8 41 40 -1

.1958 45 50 5 43 47 4

1961 42 52 10 45 45 0

1964 46 47 1 45 47 2

1967 43 47 4 45 43 -2

1970 38 41 2 42 44 2

1974 44 48 4 47 48 1

1975 52 55 3 41 42 1

1977 46 53 7 37 41 4

1980 44 44 1 42 44 2

1983 40 44 4 46 47 1

1984 40 43 4 42 43 1

1987 42 45 3 43 42 -1

1990 42 48 6 38 38 -1

1993 43 48 5 44 43 -1

1996 44 50 6 36 35 -1

8

Awakening the 'House of the Living Dead '• the Evolving Nature of the Senate

Figure 1.1: Difference Between Levels of Support for the Major Parties in Senate Elections and Seats Won (%)

50 --

40 -

0 30-

20-

0

a 10 -

c o v rn N C')

°' ,C j U) CD N- n om CD rn

CD

10rn- 05 C) rn rn rn rn rn rn rn rn rn rn rn rn

o

> -20 -0

-30-

_j

- CON/COAL

-50 1 -ALP

Year

Lijphart suggests that electoral systems, and the perceived fairness of the

outcomes they produce, are central to the degree of democratic legitimacy enjoyed by upper houses. This is certainly the case with the Australian Senate. In the period after proportional representation was first used in Senate elections in 1949 (and allowing for a period of initial uncertainty), opinion polls show popular support for the Senate rising markedly. In 1951 only one third of those people polled wanted the Senate retained. This had risen to around 50 per cent of people polled by 1959 and to two thirds of people by 1979 (see table 1.2 and figure 1.1. Popular support appears to have been so well consolidated that from 1980 onwards pollsters lost interest in the question of keeping the Senate. Indeed, between 1980 and

1990 there was little interest in the Senate at all with only four opinion polls taken on this topic by the major opinion poll organisations and all of these before 1983 (Goot et al., 1993, p. 429).9

9

The Senate, the Minor Parties and the 1993 Budget

Table 1.2: Opinion Polls Responses to the Question: Should the Senate be

Retained 1958-197910

195111 1953 1955 12 1958 1961 1964 1965 1979

Retain 37 32 45 32 52 44 42 62

Abolish 43 45 30 33 26 21 26 22

N o opinion 20 23 25 35 22 35 32 16

Figure 1.2: Opinion Polls Responses to the Question: Should the Senate be

Retained 1951-1979

While the Senate's place as a democratically legitimate institution appears to have become entrenched in popular opinion with the introduction of proportional representation, its legitimacy remains contested by those within the parliamentary system. Here debate has focused on whether elections for the Senate are as democratically representative as those for the House of Representatives. The arguments against the Senate's representative character turn on two main aspects of the Senate's electoral system. First, there is the six year term enjoyed by Senators. This is twice as long as their House of Representatives counterparts and raises questions

10

Awakening the 'House of the Living Dead'. the Evolving Nature of the Senate

about which of the two houses more clearly expresses the population's

wishes at any particular time. Second, each state has equal representation in the Senate, regardless of its population size, thus undermining the principle of one vote one value. It is this aspect of the Senate's electoral system that is most frequently criticised, leading one former Prime Minister, Paul Keating, to describe the Senate as 'unrepresentative swill'

(House of Representatives 1992, p. 2549).13

While these arguments generate rhetoric about abolishing the Senate, or curbing its powers—particularly in relation to 'supply', continuing public support for a second chamber in Australia's federal parliament makes this unlikely. Claims about the unrepresentative nature of the Senate, however, play an important role in defining the parameters of legitimate Senate action. They reinforce the view that the Senate is not a 'peoples' house' and thus has no unfettered right to impede the process of government. In this way it serves to constrain Senate power and therefore supports Lijphart's contention that the Australian Senate is moderately powerful.

Although Lijphart is justified in highlighting the profound effect that the electoral system has on the legitimacy of second chambers, his approach does not provide a sufficiently comprehensive account of the Australian Senate's experience. Returning to the opinion poll data, following the

introduction of proportional representation there was an increase in popular support for the Senate. It is difficult to draw this argument out to explain further rises in Senate support that occurred in the late 1970s. This suggests that other factors are important in explaining the legitimacy of the Senate. The argument developed through this chapter is that the behaviour of parties in the Senate is crucial in determining the way it is popularly perceived. Moreover, the minor parties have played a critical role in influencing this behaviour by facilitating and enhancing the Senate's parliamentary presence.

11

The Senate, the Minor Parties and the

1993 Budget

Party Representation in the Senate

The second criteria thatLijphart associates with the power of upper houses is what he describes as congruent and incongruent bicameralism. As

Lijphart explains:

Whether a second chamber is a meaningful political institution depends not only on its power but also on whether its composition is significantly different from that of the first chamber (Lijphart, 1987, p. 105).

What is crucial here is the extent to which the voting systems used to elect the two houses of parliament produce divergent patterns of party representation. The experience of the Australian Senate provides an excellent example of how changes in patterns of party representation,

resulting in this instance from the introduction of proportional representation, can fundamentally alter the operational logic of an upper

house.

Taking the numerical representation of parties as crucial in understanding Senate power, it is possible to identify three main phases of the Senate's development: the first is from 1901 to 1909, prior to the establishment of a

party system dominated by two main parties; the second from 1909 to 1948, when the party of government was able to control the Senate; and thirdly, from 1949 until the present, when the party of government increasingly

failed to control the Senate.

In the period immediately following Federation, from 1901 to 1909, federal parliament was dominated by high levels of party instability as three relatively equal groups—Free Traders, Protectionists and the Labor Party—competed for parliamentary representation. Seldom did one party

control both houses of parliament. Alliances were required to pass legislation through the Senate and governments simply could not dominate the upper house (Marsh, 1995, ch. 10).

The dynamic in the Senate altered significantly after 1909 as a stable party system emerged with two distinct parliamentary groupings, Labor and non-Labor, able to win . government majorities in their own right. There were only three occasions in nearly forty years (1913-14, 1929-31 and 1941-43) that the government of the day was unable to control the Senate and then

12

Awakening the 'House of the Living Dead': the Evolving Nature of the Senate

there was only once, between 1929 and 1931, that the Senate managed to

adopt successfully an independent role and actively attempted to review legislation. 14 Party discipline reinforced the capacity of the major parties to dominate parliament by placing considerable pressure on Senators to follow the party line on most issues (Reid and Forrest, 1989, p. 31). Thus the Senate emerged as a rubber stamp for the government and there was no reason why the major parties should seek to change this situation. As a former President of the Senate recently explained:

It may also be that the major parties were quite happy to maintain the 'government and opposition' approach rather than seek to develop the potential of the Senate to act effectively as a house of review. Since the major parties both viewed themselves as parties of government, they had little incentive to develop an upper house which would limit their powers when in government (Beahan, 1995, pp. 3-4).15

Government majorities in the Senate were easily won because of similarities in the two houses' electoral systems. Those differences that did exist, namely the longer length of Senator's parliamentary terms and the Senate's use of multi-member electorates, did not substantially alter the capacity of governments to win a majority in the Senate as is evident in the following table.

Table 1.3: Senate and House of Representative Majorities in 1910-1948

Election G overnment Senate majority

1910 ALP ALP

1913 CON /COAL ALP

1914 ALP ALP

1917 CON /COAL CON /COAL

1919 CON /COAL CON /COAL

1922 CON /COAL CON /COAL

1925 CON /COAL CON /COAL

1928 CON /COAL CON /COAL

1929 ALP CON/COAL

1931 CON /COAL CON /COAL

1934 CON /COAL CON /COAL

1937 CON /COAL CON /COAL

1940 CON /COAL CON /COAL

1943 ALP ALP

1946 ALP ALP

13

The Senate, the Minor Parties and the 1993 Budget

Further entrenching government domination of the Senate was the way

that the upper house's electoral system made it near to impossible for minor parties to win Senate seats. As explained, the use of party tickets in the Senate's multi-member electorates resulted in a winner take all effect, where the party that won the first Senate seat in a particular state would win all of the seats in that state. Minor parties had little chance of being

the party to first win a seat and thus were virtually excluded from achieving representation in the Senate. Indeed, part of the rationale behind the Senate adopting a first past the post system of voting rather than

proportional representation (which was the method of voting originally contained in the 1902 Commonwealth Electoral Bill) was that proportional representation was expected to encourage minor party representation in the Senate, something members of the major parties did not want (Reid and

Forrest, 1989, p. 103).

Changes to the electoral system in 1948 were to transform the Senate's representative make up. A Labor government introduced electoral reform with the intention of achieving short term political gain. The ALP was aware that it might lose the 1949 federal election but sought to keep control

of the Senate by introducing two changes to the electoral system. First, the size of the Senate increased from 36 to 60, with 10 Senators to be elected from each of the six founding states. Second, proportional representation was introduced. The Labor Party was accurate in its prediction that it would lose government in 1949. It was also correct to anticipate that the changes to the electoral system would allow it to retain a majority in the

Senate. Further, the introduction of proportional representation had the expected effect of making party representation in the Senate more accurately reflect the distribution of votes that the parties received in each state and numerical representation of the parties became more evenly

balanced.

The long term consequences of these changes, however, were far from anticipated. The most notable was the that the new electoral system made it increasingly difficult for the major parties to win Senate majorities, widening the scope for the representation of the minor parties and

independents in the Senate. With 60 seats'in the Senate, candidates only required 16.67 per cent of the vote in a half Senate election (and 9.09 per

14

Awakening the 'House of the Living Dead': the Evolving Nature of the Senate

cent in a full Senate election) to win a Senate seat. Thus it became realistic

for minor parties to win seats in the Senate. Moreover, with seats more evenly distributed between the major parties, there was a greater likelihood that minor parties, if elected, would be placed in a position of holding the balance of power. As the following chapter illustrates, the new electoral system saw substantive changes to the Senate's representative make up with non-governing majorities becoming increasingly common after 1949, and the arrival of the minor parties as balance of power holders resulting in the nature of the party dynamic in the Senate being altered. The result was to loosen the hold of party discipline as neither of the major parties were able to dominate the upper house. This had the effect of eroding executive control over parliament with non-government majorities in the Senate capable of rejecting the government's policy and legislative agenda. The result was a progression towards an increasingly powerful and independent Senate.

Lijphart argues that incongruence in the representative make up of lower and upper houses of parliament leads to the increasing significance of upper houses. The remainder of this monograph is a testament to the accuracy of

this claim with regard to the Australian Senate and its institutional evolution.

Characterising Senate Resistance to Executive Power

The problem with Lijphart's approach is that it fails to provide the tools required to analyse the various forms of behaviour available to non-governing parties in the Senate when they encroach upon the government's prerogative to govern. The following section of this chapter aims to fill this gap. Three forms of activity are identified: obstructionism; review and policy initiation. The chapter argues that the logic of the two party system means that the dominant pattern of opposition behaviour when it has a Senate majority is obstructionist, or at the very least tends towards adversarialism. When minor parties hold the balance of power there is scope for all three types of activism, with the approach taken reflecting the aims of the minor party in question.

15

The Senate, the Minor Parties and the

1993 Budget

Obstructionism, Review and Policy Initiation

Obstructionism is a term that is commonly used by governments to describe any form of Senate activism that challenges its policy or legislative agenda.

In this respect, it is a powerful form of political rhetoric, designed to silence any parliamentary actor who questions the government and its authority.

Commentators also use the term obstructionism to identify a more specific type of parliamentary behaviour. It describes those instances in which government aims are obstructed by a thoroughly negative act designed with partisan advantage in mind. Importantly, the improvement of legislation or policy is not the goal of obstructionism. This is a point made by Fusaro when he distinguishes between political obstruction and legitimately constructive behaviour of an opposition-controlled Senate (Fusaro, 1968, p. 124). The negativity associated with obstructionism draws first on the fact that it undermines the government's right to govern and thus contradicts notions of responsible government; second and crucially, it fails to provide anything productive to replace the governability it erodes: it holds no promise of making parliament function more effective, improving policy or to better the legislative process.

Whether or not the obstructionist label is warranted is not always clear cut.

For instance, it is rare for any political party to act without partisan considerations in mind and thus it is possible to describe most instances in which executive prerogative is challenged as a form of obstructionism.

Furthermore, as obstructionism is not viewed to be legitimate political behaviour, there is a good chance that when used it will be justified in other terms, such as the review of legislation. In spite of these precautionary comments, discussion later in this monograph demonstrates that obstructionism remains a useful way of characterising the behaviour of non-

governing parties in the Senate.

Like obstructionism, the review function impinges upon the government's right to impose its agenda unhindered. Yet unlike obstruction, it offers something in return: the promise of legislative scrutiny and an executive that is held to account for its actions. As Richard Mulgan explains:

the function of review, understood as the scrutinising of government subjects government policies and decisions to public examination by

16

Awakening the 'House of the Living Dead': the Evolving Nature of the Senate

bringing to bear the spot light of publicity and criticism. It involves

holding government accountable to Parliament and the electorate and implies an adversarial relationship between those scrutinised (the government) and those scrutinising (those outside the government), with the government retaining ultimate responsibility for decisions, whatever pressure it may have been subjected to through the process of scrutiny

(Mulgan, 1996, p. 198).

As Mulgan makes clear, scrutiny and accountability are central features of

the review process. While review makes the government's life more difficult,

these qualities are usually viewed as compatible with responsible

government because they do not erode the government's role in determining

the policy agenda. Instead, review is associated with the processes that

policies encounter. Such a fine distinction between 'policy' and 'review',

however, conceals the extent to which the active review of the legislative

process has policy implications. Thus as Mulgan explains '...the line

between process and substance is often blurred. Subjecting governments to

the process of scrutiny may lead to a change of policy outcome' (Mulgan,

1996, p. 199). The result is that the more actively the review of government

legislation is pursued by non-governing parties in the Senate, the more

likely the policy agenda of the government will be called into question.

While it is widely accepted that review is a crucial aspect of the Senate's

role considerable debate has been generated regarding whether or not the

Senate, as a 'house of review' should impinge upon policy. The argument

that is most frequently put forward is based on the premise that as the

elected government, the party with a majority in the House of

Representatives has the mandate to dictate the policy direction of the

nation (Emy, 1997). The Senate's role, in line with its review function, is to

make the government accountable if it strays from its electoral promises; or

to keep the government to its legislative commitments. Policy becomes the

domain of the executive which is located in the House of Representatives as

the 'house of government'.

Such a juxtaposition between the 'house of review' and the 'house of

government' is deceptive and ignores the reality that both of Australia's

federal houses of parliament have multiple functions that they may

legitimately undertake. It is therefore wrong to assume that the House of

17

The Senate, the Minor Parties and the

1993 Budget

Representatives is only a 'house of government' as it also has a role in the

review of legislation. Similarly, the Senate's activities cannot be understood simply by making reference to its role as a 'house of review' as it also has executive functions. Some of these are not called into question, like the practice that Cabinet be partially drawn from the Senate. No doubt, the fact that this maintains party discipline and helps sustain executive dominance in the Senate explains why the major parties find this alternative function

acceptable.

The initiation of policy is another executive function which may be undertaken by the Senate. Within the boundaries of the Constitution this is legitimate activity. Even when it comes to the restrictions placed on the Senate's dealings with budget bills, the Constitution allows the Senate to request amendments, thus providing the power to influence all legislation.

Yet the conventions of responsible government have constructed powerful restrictions on non-governing parties initiating policy. The government's mandate to implement its policy program remains a potent argument for those who view the process of government through the framework of responsible government. Another feature of the argument against non-

governing parties initiating policy is an emphasis on the way that governments need to be held accountable for their decisions and the notion that this accountability is upset if government policy is interfered with.

Thus, although constitutionally valid, policy initiation by non-governing parties in the Senate is usually much more controversial than review because of the potency enjoyed by claims about responsible government which associates policy functions with the executive.

The continuing importance of responsible government in Australia's parliamentary system means that the review process is the least contentious way that non-governing parties can challenge executive dominance, but it is not the only way with policy initiation or obstructionism being alternative strategies. There are varying degrees to which each of these activities can be undertaken at any particular time and

they may well overlap.

18

Awakening the 'House of the Living Dead': the Evolving Nature of the Senate

Conclusion

Lijphart sets out to identify the varying degrees of importance enjoyed by upper houses in different countries. To do this he presents two key

variables: the relative power of second chambers (defined by constitutions

and constitutional conventions) and their composition compared to lower

houses. In the Australian example the legacy of responsible government

and federalism is still apparent in the relationship between the two houses

of parliament. Yet there have been changes. Two of these are especially

pertinent to understanding the Senate's evolution, and both may be linked

with the introduction of proportional representation in 1948. First, the

greater popular legitimacy of the Senate has increased its relative power;

and second, patterns of party representation in the Senate have reduced the

chance that the government of the day will win a Senate majority and thus

made it more likely that the government's policy and legislative agenda will

be faced with obstacles in the Senate. One result of these changes has been

to increase the likelihood that non-governing parties within the Senate will

challenge government initiatives. Lijphart's approach, however, does not

provide a way to identify the different forms of behaviour available to non-governing parties when they have a majority in the Senate. The final

section of the chapter addressed this issue by presenting three forms of

activism that may be recognised, namely, obstructionism, review and policy

initiation. The following chapter provides a historical overview of the

behaviour of non-governing majorities in the Senate.

End notes

1. Kernot, C. 1993, Power passion and balance, Speech, National Press Club, 5 May 1993.

2. Lijphart describes those systems in which the two houses have equal powers as symmetrical bicameralism and those systems in which the upper house is less powerful, asymmetrical bicameralism.

3. Lijphart classifies Australia as an example of moderately asymmetrical bicameralism.

19

The Senate, the Minor Parties and the 1993 Budget

4. See also Sharman, 1990, P. 2.

5. As occurred in 1975 with the Whitlam dismissal.

6. Although the nexus provision has also ensured that the Senate does not become smaller than half the size of the House of Representatives and this has meant that efforts to diminish the Senate's power have also been thwarted.

7. For instance the Government won 33 to 3 Senate seats in both 1934 and 1948 (Uhr, 1995, 138).

8. For all of the details see appendix 4. The choice of the term Conservative/ Coalitions, is simply to allow for all the different conservative parties that have formed Coalitions and won government or organised as the formal opposition.

9. Goot, M., Ridley, P., Day, P. Gibbons, L., McNair, I., Beed, T. 1993 Australian Opinion Polls 1941-1990 Volume II 1977-1990 Thorpe, Melbourne p. 429.

10. This table is made up of data from the following opinion polls: Morgan Gallup Polls: MGPO 077, December 1950: 734; MGPO 0095, April 1953: 920; MGPO 0115, December 1955: 1137; MGPO 0134, October 1958: 1358; MGPO 0154, December 1961: 1582; MGPO 0171, August 1964: 1783; MGPN 300, December 1979: 83, January 1980.

11. The question in the 1951 and 1953 poll was should the Senate be abolished.

12. The question in 1955 was whether the Senate should continue the way it is, should it be changed or should it be abolished? For consistency across the data I have put 'change it' and 'abolish it' in the same category.

13. Australia, House of Representatives 1992, Debates, vol. HRV 186, p. 2549.

14. See chapter 2 for details.

15. For a discussion of this period see Marsh, 1995, chpter 10.

20

Chapter 2: Non-Governing Majorities in the Senate:

A Historical Overview 1910-1992

Introduction

There are two main types of non-governing majorities in the Senate: those in which the opposition controls the Senate and those where the minor parties and/or independents hold the balance of power. It will be argued that while opposition majorities in the Senate tend towards obstructionist behaviour, there is a broader array of activism when minor parties and independents hold the balance of power. This reflects the logic that drives two very different types of parties. While oppositions view themselves as

'governments in waiting', minor parties occupy a unique and vulnerable position as balance of power holders. They typically have little to gain by forcing an election. Instead, an election has the potential to compromise the balance of power position they enjoy.

21

The Senate, the Minor Parties and the 1993 Budget

Opposition Majorities

Since the establishment of a stable party system in 1910 there have been four instances in which the opposition has enjoyed a majority in the Senate.

Three of these occurred before the mid 1950s and the fourth took place in 1975, at the very end of the Whitlam Government's period in office. In three of these instances (1914, 1949-51, 1975) the result was a double dissolution election. A similar outcome might have occurred in 1929 except there had been two general elections in less than twelve months and a third was not considered feasible (Fusaro, 1968, p. 126-128).

The most outstanding feature of all four examples is the instability of parliament during the period in which the opposition controlled the Senate.

As the frequency of double dissolution elections suggest, the degree of conflict between the two houses left the parliament near to, if not, unworkable. In each case opposition activism in the Senate undermined the government's policy agenda by disrupting its legislative program. In 1914

this occurred with the Senate rejecting two, and amending five, government bills. The attitude of the opposition-controlled Senate was made apparent when it took the unusual step of rejecting the Government Preference

Prohibition Bill 1914 at the first reading stage. Such action was obstructionist in character as it did not allow for any debate on the substance of the bill but only served to undermine the government's legislative program. Ultimately it was the rejection of this bill that acted as a double dissolution trigger (Odgers, 1995, p. 302).

In the second period where there was an opposition-controlled Senate (1929-31) 12 bills were rejected and 47 successfully amended. This amounted to a significant amount of the government's policy program being altered or rejected by the Senate. In addition, the opposition used other tactics over this period to make the government's life difficult, for instance, sending the Central Reserve Bank bill off to a committee with the aim of creating a delay that would render the legislation ineffective. From

1949-51 the Labor majority in the Senate continued with this trend as it sought to erode governability in a variety of ways. One example was when the government attempted to complete its business with the Commonwealth Bank Bill in 1950. With the aim of finalising its

22

Non-Governing Majorities in the Senate: A Historical Overview 1910-1992

deliberations on this bill in mind the government rostered an extra sitting

day for the Senate. ALP Senators seeking to delay the process failed to turn up, ensuring a quorum was not achieved and that debate could not take place (Fusaro, 1968; Odgers, 1995, ch. 1). The final period in which there was an opposition-controlled Senate took place in the latter half of 1975, a period that has been well documented. To summarise, the opposition took advantage of its majority (created briefly by a challenge to the replacement of Senator Milliner by Senator Field) to delay the government's Budget and in doing so created the conditions necessary for the Whitlam Government's controversial dismissal (Fusaro, 1968, p. 124-6; Odgers, 1995, p. 28).1

On each of these four occasions the actions of the opposition-controlled Senate is most accurately described as obstructionist. Partisan advantage was the motivating factor behind the delay or blocking of legislation and there is little to suggest the improvement of policy or review processes was the main goal of the opposition. Instead, the rationale behind such action was to undermine the government whenever and wherever possible and in

doing so enhance the likelihood that it would win government at the next election. This should come as no surprise to anyone who has had any dealings with the adversarial style of politics that characterises the

relationship between the major parties in Australia. In a system where two parties (or groups of parties) vie to win and maintain executive authority at the expense of the other, it seems only logical for the 'alternative government' to make life difficult for the incumbent government.

These scenarios suggest that principles of responsible government have done little to constrain opposition-controlled Senates and their use of obstructionist tactics. One reason for this is the capacity of a double dissolution to resolve the conflict. In each instance, governability was re-established through an election (and all but one a double dissolution) which left the government in control of the Senate rather than by changing patterns of opposition behaviour. As elections are viewed as the mechanism that keeps government and parliament accountable to the people within the framework of responsible government, the system's legitimacy has been maintained, even in the face of extreme instances of obstructionist behaviour. 1975 and the controversy over the Whitlam Government's

dismissal serves as a good example of this phenomenon, with the election

23

The Sensate, the Minor Parties and the 1993 Budget

that brought Fraser to office acting as a circuit breaker for the crisis that

Senate obstructionism was generating. Considering the fact there had already been a double dissolution election the previous year, the electorate demonstrated considerable tolerance for such behaviour, reflecting the limited impact that notions of responsible government have in such contexts.

To summarise, the patterns of behaviour that emerge when oppositions have won a majority in the Senate have been adversarial in character and encouraged the opposition to use obstructionist tactics. For oppositions intent on having another attempt at electoral victory in the lower house, this has been a popular strategy. Questions about the legitimacy of this behaviour have tended to be forgotten by a public intent on electing the next government, rather than punishing the old opposition.

Minor Parties in the Senate

The degree of influence enjoyed by minor parties and independents in the Senate is affected by their numerical representation and that of the major parties. When the government or opposition has a majority, the vote of the minor parties is unimportant and usually results in their marginalisation.

Since the mid-1950s, however, it has been the norm, rather than the exception, for minor parties and/or independents to hold the balance of power. It is in these situations that minor parties and independents have considerable influence because the government requires their support, or that of the opposition, to pass legislation. This is commonly referred to as holding the balance of power. What is meant by holding the balance of power, however, is not quite as straightforward as it first appears. This is because a Senate majority is required to pass or amend legislation, while blocking legislation only demands an equal vote to succeed, resulting in

three different balance of power scenarios. These are demonstrated in table 2.1.

24

Non-Governing Majorities in the Senate: A Historical Overview 1910-1992

Table 2.1: Scenarios of Minor Party Power

Scenario 1 Scenario 2 Scenario 3

When minor parties and . deny the • deny the • deny the

or independents have government and the government and the government and the

the numbers to: opposition the opposition the opposition the

support required for support required for support to win a a tied vote a tied vote majority

deny the government and the opposition the support to win a majority

The consequences for their capacity to influence voting in the Senate

• always have the balance of power when voting in the Senate

• have the balance of power only when the government is passing legislation or amending its own legislation

• have the balance of power only when the opposition is amending government legislation

Conditions required for • have at least two • have at least one • at least one Senate

minor parties and/or Senate seats Senate seat seat

independents: • neither government • government is one . opposition is one

nor opposition is short of a majority short of a majority

able to secure a tied and is therefore able and is therefore able vote or a majority to block to block legislation

without the support amendments without minor party

of the minor parties without minor party support but not to or independents support but not to pass amendments on

pass legislation on its own

its own

The degree to which minor parties and independents may influence the

legislative process is determined by the balance of power scenario that is in

place. Minor parties and independents are able to exert the greatest

influence in scenario one, when they hold the balance of power irrespective

of the type of vote that is taking place. Scenarios two and three see minor

parties with greater limits on their capacity to influence voting outcomes as

their position as balance of power holders is restricted to particular types of

votes. Table 2.2 demonstrates the extent to which these various

combinations of minor party representation occurred between 1961-1975.

25

The Senate, the Minor Parties and the 1993 Budget

Table 2.2: Combinations of Minor Party Representation: 1961-75

Year Comments Govt. ALP COAL DLP IND LM Minor party/

independents power

1961 COAL 28 30 1 1 0 DLP or Independent

support required to pass government legislation; both Independent and DLP required to block legislation; no impact on amendments

1964 COAL 27 30 2 1 0

1967 COAL 27 28 4 1 0

1970 COAL 26 26 5 3 0 DLP holding the

balance of power

1972 ALP win govt ALP 26 26 5 3 0 DLP and CP sharing the

balance of power.2

1974 double ALP 29 29 0 1 1 Independent and LM

dissolution holding balance of

election power

1974 Townley (IND) ALP 29 30 0 0 1

returns to Liberal Party

1975 Murphy resigns. ALP 28 30 0 1 1 INDs required to amend

Replaced by Bunton (IND)

1975 Milliner dies. ALP 27 30 0 2 1

Replaced by Field (IND)

When minor parties hold the balance of power this position may be used in

different ways, reflecting the variety of objectives that minor parties seek to achieve through parliamentary representation. It is this point that has led Uhr to identify two periods of Senate reform since the introduction of proportional representation. The first of these he describes as the age of majorities which took place between 1949 and the late 1960s and 'covers the hey-day of the first minor party, the Democratic Labor Party (DLP)...'

(Uhr, 1997b, p. 78) Uhr points out that the rationale for the DLP's existence was to keep the ALP from winning government. To achieve this end it sought to consolidate the power of the Coalition, resulting in the age of majorities being characterised by a 'prevailing ethos which was compatible with the norms of strong party government' (Uhr, 1997b, p. 78). Thus, even though the DLP held the balance of power for some of the time during the

26

Non-Governing Majorities in the Senate: A Historical Overview 1910-1992

age of majorities it '... did comparatively little to transform the ways of the

Senate' (Uhr, 1997b, p. 78).

Uhr's characterisation is limited to the extent that it does not draw out the

impact that the presence of the DLP had on the Senate, irrespective of its objectives. While it is clear that the political objectives of the DLP meant it

did not pursue measures directed towards reforming the Senate this should

not obscure the fact that the very presence of a minor party in the Senate,

one that held the balance of power, did alter the dynamics of that

institution. It is the absence of party discipline that is the crucial factor

here and the result was that even in the age of majority there were

substantive changes to the operational logic of the Senate. Solomon, in

1969, captures this effect:

In the Senate the atmosphere and the outlook are totally different [to the House of Representatives]. There always exists the possibility of a vote against the Government given the key position of the DLP and the role of

dissident Liberals. The second reading takes on a new significance.

General principles are discussed, as in the House, but Senators are genuinely interested in hearing what is said, if only to judge the possibility of 'rebellion' by Liberals, or to judge the way the DLP is going to vote. In committee, debate is far more intense. Senators question one another, rather than merely interjecting to score points as is the practice in the House, and seek to frame arguments to convince the doubtful. The

same amendments as were put in the House by the Opposition are put again, but the Opposition does not necessarily limit itself just to these amendments. Opposition Senators responsible for controlling their side of the Bill sometimes come up with amendments of their own which have not had prior party approval, but which clearly fit in with party policy (Solomon, 1969, p. 527).

Solomon's description makes it evident that the dynamic in the Senate and

the relationship between all of the parties was altered because the DLP

held the balance of power and were not subject to the Coalition's party room

discipline. The outcome of this situation was that the review functions of

the Senate were enhanced.

The clearest reflection of this development can be found in the

establishment of the Senate's Standing Committees in 1970. The purpose of

27

The Senate, the Minor Parties and the 1993 Budget

parliamentary committees has long been connected with the scrutiny and

accountability functions associated with the review process (Emy and Hughes, 1991, p. 365). Thus, as early as 1956, J. R. Odgers, as Clerk of the Senate, recommended a Committee system '...to watch and appraise the administration of laws and to inform public opinion in relation to certain

defined fields of governmental operations' (Report of the Joint Committee on the Parliamentary Committee System, 1976, p. 110). Pressure to initiate a new committee system came from a number of sources including ALP

Leader of the Opposition in the Senate, Senator Lionel Murphy, Odgers and the Leader of the Government in the Senate, Senator Kenneth Anderson.

Three proposals for the Senate system of standing committees were put forward in 1970. Murphy advocated a system of seven committees, Anderson five estimate committees, while the DLP leader, Vincent Gair, argued in favour of a more conservative approach with the committee

system being introduced over a longer period of time. In the end, both Anderson and Murphy's proposals were supported, resulting in 12 Senate committees being established (Millar, 1991, p. 2-3).

The events surrounding the creation of the modern committee system are interesting in two respects. First, there is the bipartisan support for the committees that was evident in the proposals of Murphy and Anderson, suggesting that the impetus for the Senate to play a stronger review role

was widespread. This is confirmed by the establishment of more Committees than either Anderson or Murphy proposed, pointing to the enthusiasm of the chamber for an extension of its role through an expanded committee system. Second, there is the apparent contradiction between the fact that the very presence of the DLP enhanced the Senate's review functions, while its particular political orientation was to act as a check on this progression. In this respect the institutional dynamic of the Senate was being altered as a consequence of a minor party holding the balance of power, but in a way that extended far beyond the political objectives of the

DLP.

A second limitation associated with Uhr's notions of an 'age of majorities' is the way it underplays the DLP's behaviour during the Whitlam Government. The outstanding feature of this period in the Senate's history was the commitment by anti-Labor parties to obstruct government

28

Non-Governing Majorities in the Senate: A Historical Overview 1910-1992

legislation. Prior to 1974, the Liberal Party could only achieve this outcome

with the support of both the DLP and the Country Party as the joint balance of power holders. By voting together the Liberal and Country parties, along with the DLP consistently disrupted the government's

legislative program. In the first half of 1973 three bills were postponed and another five bills amended (Odgers, 1995, 37). By year's end there had been speculation that supply would be blocked (unfounded, this time) and a further nine bills had failed to pass the Senate. Three other bills were received for a second time from the House of Representatives and failed to pass through the Senate, thus providing the double dissolution trigger that the government ultimately took up in 1974 when supply was effectively denied (Odgers, 1995, p. 39-41).3

From the outset both the opposition and the DLP failed to recognise the mandate that a government is usually accorded immediately following an election. The Liberal Party's justification for such action was, as the Leader of the Opposition in the Senate made clear:

...that the Upper House was deliberately set up by the founding fathers with its enormous powers to act as a check and a balance and that the Senate might well be called upon to protect the national interests by exercising its undoubted constitutional rights and powers (Odgers,

1995, p. 33).

Thus, the non-governing parties sought to harness notions associated with

the Senate's review functions, such as acting as a 'check and balance', to justify their actions. Such claims might have been effective rhetorical devices. The point of their action was not to improve legislation, however, or enhance accountability. Rather, it was aimed at forcing an election.

In terms of existing views about the Whitlam Government's conflictual relationship with the non-governing majority in the Senate, the distinction between review and obstructionism is a crucial one. It is common to blame an activist Senate for the obstruction the government faced. This may be true but it does not mean that activism by non-governing parties in the

Senate will always be of this sort, as arguments against a powerful Senate sometimes suggest. The second period identified by Uhr, 'the age of

29

The Senate, the Minor Parties and the 1993 Budget

minorities', demonstrates the wider array of activism that may emerge as a

result of minor parties holding the balance of power.

What characterises the 'age of minorities', according to Uhr, is 'the arrival of a second wave of minor parties which were less committed to shoring up the major parties in government'. (Uhr, 1997, p. 78). The two minor parties that have held the balance of power over this period were firstly the Australian Democrats from 1981-1993 and following the 1993 election, the

Democrats were joined by two Green (WA) Senators. On a number of occasions Independent Senator Brian Harradine has shared the balance of power. The final part of this chapter considers the entry of the Democrats as balance of power holders in the Senate. As table 2.3 demonstrates, the Democrats held the balance of power in their own right for all but the first two years of this period. During the first couple of years, Independent Senator Brian Harradine could, by supporting the government, block opposition amendments to legislation.

Table 2.3: The Australian Democrats: Holding the Balance of Power: 1981-1990

Year Govt ALP COAL AD GWA Other IND Minor party/ independent

power

1981 COAL 27 31 5 1 AD holding balance of

power over passing legislation; Independent sharing balance of power over amendments.

1983 ALP 30 28 5 1 AD holding the balance of

power on all occasions.

1984 ALP 34 33 7 1 1 AD holding the balance of

power on all occasions.

1987 ALP 32 34 7 1 2 AD holding the balance of

power on all occasions.

1990 ALP 32 34 8 1 1 AD holding the balance of

power on all occasions.

The Democrats used their position as balance of power holders in a manner

that stands in stark contrast to the DLP's obstructionism during the Whitlam government. The difference between these two parties can be put down to what they sought to achieve through their parliamentary

30

Non-Governing Majorities in the Senate: A Historical Overview 1910-1992

representation. While the DLP was driven by its desire to keep Labor out of

office, the rationale for the Australian Democrats existence was of a

fundamentally different sort, affecting the role they have assumed as a non-governing party in the Senate.

There have been two main dimensions to the Democrats' approach to

parliamentary representation. First, there is the party's policy objectives,

which have been summarised by Hiroya Sugita as:

1. distinctive emphasis on social justice and improvement of equality not only by economic but also by social and cultural means,

2. a robust commitment to improving the quality of life, protecting the environment and achieving an environmentally sustainable economy,

3. firm stand on civil and moral liberties based on their belief in individual conscience and initiative,

4. promotion of community activities by decentralising powerful sectional interests, and

5. belief in participation in various decision making processes and in a co-operative approach based on maximum consensus (Sugita, 1997, p. 136).

Second, and also of considerable importance is the role that the Democrats

have assumed in enhancing the Senate's review functions. This point was

brought home to the electorate during the 1980 election campaign while the

Democrats coined the popular slogan 'keeping the bastards honest'. Both

policy change and review are crucial aspect of what the Democrats have

attempted to achieve since assuming the balance of power in 1981.

The first opportunity to watch the Democrats in action as balance of power

holders arose in the debate over the 1981 Budget. This example represents

one of the more controversial episodes where the Democrats used the

balance of power to influence legislative outcomes and it highlights the

policy and review role played by the party as well as the constraints the

Democrats have placed on their parliamentary activity. The Democrats

were put in a position where they could affect key aspects of the Budget the

day after the Coalition's 1981 Budget was tabled in parliament when Labor

31

The Senate, the Minor Parties and the

1993 Budget

leader, Bill Hayden, announced that the ALP would block the Fraser

Government's proposal to have an across the board increase in levels of sales tax (Spindler, 1981a, p. 4). In policy terms the Democrats were opposed to the sales tax increases because they would have a

— disproportionate effect on low income workers and be in direct opposition to the Democrats' concern for social equity (Spindler, 1981a, p. 5). The introduction of the sales tax also deviated from the policies the government had outlined during the 1980 election campaign and the party's commitment to the review required to ensure that this inconsistency was highlighted. In terms of both their policy objectives and the review of legislation, then, it made sense for the Democrats to amend the relevant Budget bills.

A pledge made by the Democrat Senators prior to the 1980 election, however, complicated the party's position. This declared that:

...the Australian Democrats, if gaining a position of 'balance power' [sic] in the Senate, would not use their voting numbers in such a way as to cause the blocking of supply or money Bills in a manner which would prevent the majority party in the House of Representatives from

governing (Sugita, 1995, p. 357).

In the months following the Budget being brought down, the Democrats struggled to come to terms with how to deal with these competing demands.

First, the party successfully requested amendments to the Sales Tax Bill (with the support of the ALP, Independent Brian Harradine and National Party Senator Flo Bjelke-Petersen) but declared that it would not force the issue if the government failed to make the requested amendments in the House of Representatives. When the Coalition government did not make the requested amendments, the Democrats did not concede as they had originally indicated, but with the support of Harradine and the ALP pressed the requested changes (Spindler, 1981b). The justification for this change of position was that this delay would allow the public to consider the issue properly (Senate, 1981, p. 1399). Finally, when the bill was returned

unchanged to the Senate, the Democrats supported the Labor Party and blocked the legislation (Senate, 1982, p. 662-3).

32

Non-Governing Majorities in the Senate: A Historical Overview 1910-1992

This early experience of the Democrats as balance of power holders reveals

a number of interesting points. The first is the contrast between the DLP and the Democrats on the issue of governability. The point of the Democrats pledge was to ensure that they were not viewed as challenging the government's right to govern. A similar concern underlay their cautious approach to blocking legislation if the House of Representatives ignored their demands. The pledge itself defined the constraints on the Democrats in terms of governability. Yet as events progressed it became apparent that blocking this bill would leave governability intact. Only then did the party feel free to block the Budget legislation. What is crucial about this example is the seriousness with which the Democrats treated this issue and in doing so, considerable distance ought to be placed between their opposition to aspects of the Budget and the obstructionism adopted by the DLP in the

1970s.

Second, the response of the Democrats to the 1981 Budget reveals that while the party was interested in reshaping government policy in such a way that it was more consistent with their policy objectives, their policy initiation role was limited to modifying an aspect of government policy.

There was no attempt to influence the broad goals of policy which might be expected in a more substantial challenge to executive power. Thus, the Democrats started out with a very restricted view of their role in policy initiation. As debate over the Budget's future went on, the Democrats' willingness to challenge the government grew as they realised that amending one Budget bill did not amount to hijacking the government's prerogative over the whole legislative agenda. Further reinforcing this approach was its consistency with the Democrats' efforts to ensure the

Senate's review functions were fully performed by drawing popular attention to the government's deviation from its electoral promises.

In sum, the Democrats were pursuing a limited policy initiation role, with a much greater emphasis on the review of legislation and an active avoidance of obstructionist tactics. This trend followed the Democrats throughout the 1980s and early 1990s. Those policy questions that the Democrats took the

strongest position on over this period were closely connected to their review role: for instance, the party's stand on the Australia Card in 1986-7, where the Democrats helped defeat government legislation in the Senate.

33

The Senate, the Minor Parties and the 1993 Budget

Certainly, the Democrats opposed the Australia Card Bill because it was

not consistent with the party's emphasis on civil liberties. Yet their primary

concern was not that it was in conflict with Democrat policy, but that it was

poorly conceived legislation (Uhr, 1993, p. 361). This point is brought home

by the fact that there are only a handful of instances in which the

Democrats directly opposed with the executive during this period. This is

significant when the policy gap between the Democrats and the major

parties is taken into account.

Instead the Democrats placed greater emphasis on enhancing the Senate's

review functions. Evidence of these changes can be found in the increasing

number of hours that the Senate sits and the greater number of

amendments moved (Uhr, 1993, p. 362). Then there is the committee

system which has become an increasingly central part of the legislative

process. 4 As Uhr notes, in 1983 three bills were referred to the committees,

by 1990-1991 this had grown to 44 with 155 amendments recommended.

The impact of this development is described by Uhr in the following terms:

The use by the Senate of standing legislative committees... suggests a trend in which senators play a much busier role in legislative examination of public policy, with one result being that governments can no longer predict either the likely delay or probable result of parliamentary business. (Uhr, 1993, p. 363)

According to Tilby-Stock, the Democrats have played a crucial role in this

process:

Democrats have contributed enthusiastically to the expansion and reinvigoration of the Senate and joint committee system and are the vital ingredient in the Senate's often rigorous scrutiny of bills from the House

of Representatives. (Tilby-Stock, 1994, p. 181, emphasis added)

The Democrats and their commitment to review are not the only

'ingredients' necessary to explain such changes. If the impact of the DLP is

anything to go by, then the presence of a minor party, whatever its

objectives, breaks down party discipline with the likely result being the

likely facilitation of the review process. This directs attention to the

contribution that Independents Jo Vallentine and Brian Harradine have

made to the review process, as parliamentarians whose interests were not

34

Non-Governing Majorities in the Senate: A Historical Overview 1910-1992

tied up with party discipline (Vallentine, 1995, p. 62-3). 5 Furthermore there

are Senators within the major parties who take review, and the contribution that the committees make to this process, seriously and thus have played a role in furthering these trends. Nonetheless, it is still the case that the Democrats have played a central role in making the

Committee system and review an important part of the parliamentary process.

There have been a number of occasions when the presence of the Democrats and their use of the Committee system has been influential in enhancing the review process. These include the Senate Select Committee on Superannuation and the Superannuation Guarantee Levy, the print media inquiry and 'sports rorts' affair, all examples where the Democrats were

able to use the Committee system to publicise an issue and allow for greater parliamentary scrutiny of the government (Sugita, 1995, 245-259). Also of some note in enhancing the review process was the introduction of what has become known as the 'Macklin motion', named after its initiator, Democrat Senator Michael Macklin. The purpose of this motion was to avoid large quantities of legislation being dealt with by the Senate in the last couple of weeks in a sitting period which frequently led to an overly hasty consideration of these bills. What the Macklin motion did was to pass a resolution that any legislation entering the Senate after a particular date would not be considered until the next sitting period (Odgers, 1995, p. 253-4). While problems were associated with the outcome of this procedural reform it does point to the way that the Democrats were using their position in the Senate to extend the scrutiny of legislation.

Conclusion

This chapter has argued that the adversarial relationship between the major parties leads oppositions to assuming obstructionist tactics when enjoying a majority in the Senate. By way of contrast, there has been a greater variety of approaches by non-governing majorities when they include minor parties and Independents. At times this has seen obstructionist patterns of behaviour replicated, as was the case with the DLP from 1972. There can be doubt that this reinforced the belief that the

35

The Senate, the Minor Parties and the 1993 Budget

Senate was likely to play a useful role within Australia's parliamentary

system. By way of contrast, the Democrats with their explicit commitment to review, have adopted a very different approach. The following chapter provides an in depth account of how the Greens and the Democrats responded to such a position in the context of the 1993 Budget conflict.

Endnotes

1. The logic of the adversarial system also influences how governments behave when they face an opposition majority in the Senate. Their hope is to create conditions in which a Senate majority can be won. In 1914, 1951 and 1975 there is evidence to suggest that the government of the day was looking to the double dissolution trigger as a means to this end.

2. This was one of the few occasions where the Country Party was not a Coalition partner with the Liberal Party (Woodward, 1994, p. 166).

3. The Senate, by voting against a government motion with regard to the 1974 Budget, effectively denied supply to the government.

4. Also see Uhr's comments on the impact of the Committees of Finance and Public Administration and Estimates Committees on improving the accountability of public administration (Uhr, 1993, p. 364-67); See also H.

Sugita for the Democrats and the Committee system (Sugita, 1995, p. 243-245).

5. See especially Vallentine's comments about her role in the Joint Foreign Affairs, Trade and Defence Committee (Vallentine, 1995, p. 62-3).

36

Chapter 3: The 1993 Budget: Setting the Scene

Introduction

The introduction to this monograph noted that the conflict over Labor's 1993 Budget has assumed prominence in contemporary analyses of the way the Senate operates and the role played by the minor parties in this process. For this reason, a thorough analysis of the Budget conflict is warranted. The remainder of the monograph has this objective in mind with

a particular emphasis on evaluating the willingness of the minor parties to challenge executive power, the forms this challenge took, and its intensity.

The following chapter begins by explaining the implications of the level of minor party representation in the Senate in 1993. This gives a clear indication of precisely when each of the minor parties was able to effect legislative outcomes. The chapter then sets the scene in which the minor

parties found themselves to be holding the balance of power. The final two sections of the chapter evaluates how the Democrats and the Greens responded to this situation prior to the substance of the budget bills being debated in the Senate.

37

The Senate the Minor Parties and the 1993 Budget

Minor Party Representation in the Senate: 1993

As chapter two explained, the Democrats have held the balance of power in the Senate since 1981. In 1993 an important change occurred with the election of a second Green (WA), Dee Margetts, to the Senate. This resulted in the balance of power being shared between the Democrats, Greens and Independent Brian Harradine. Understanding the way the balance of power operates in the Senate requires an awareness of two factors. First, there is the Constitutional requirement (s. 23) that to be successful in passing legislation or moving a motion, a simple majority (50 percent + 1) is required , while to block legislation, or a motion, an equal vote is sufficient.

This means that different combinations of parties may be able to block legislation compared to passing or amending legislation.

Table 3.1: Total Senate Numbers in 1981-1993

ALP COAL AD NDP GWA IND

1981 27 31 5 1

1983 30 28 5 1

1984 34 33 7 1 1

1987 32 34 7 1 2

1990 32 34 8 1 1

1993 30 36 7 2 1

Second, the particular distribution of party representation at any one time

has significant ramifications for the capacity of the minor parties to influence legislation. In 1993 there were a number of different scenarios in which different minor parties and independents held the balance of power.

Each of these will be briefly described. First, when the Coalition opposed government legislation, the ALP required the support of both the Greens and the Democrats to have these bills passed, while Harradine's vote made no difference to the outcome. Second, in Coalition attempts to block government legislation the support of either the Greens or the Democrats was required, but again Harradine's vote was of no consequence.

Harradine's vote did become crucial, however, when the Coalition was

38

The 1993 Budget: Setting the Scene

attempting to move a motion. In those instances where the Coalition had

the support of the Greens but not the Democrats, Harradine would cast the deciding vote, wielding the balance of power. Additionally, when the Greens initiated a motion and had the support of the Coalition, but not the Democrats or the government, Harradine's vote was crucial.

Table 3.2: Matrix of Possible Senate Voting Pattern: 1993

Type of action Votes Possible Combinations

required

ALP to pass 39 ALP: 30 ALP: 30

government legislation COAL 36 AD: 7

Greens: 2

Total 66 39

COAL to amend 39 ALP: 30 COAL: 36 COAL 36

government legislation COAL 36 AD: 7 GWA: 2

Harradine (IND): 1

Total 66 43 39

ALP to block 38 ALP: 30 ALP: 30 ALP: 30

amendments COAL 36 AD: 7 AD: 7

GWA: 2 Harradine (IND): 1

Total 66 39 38

COAL to block 38 COAL: 36 COAL: 36 COAL: 36

government legislation ALP: 30 AD: 7 GWA: 2

Total 66 43 38

Setting the Scene

For the minor parties, balance of power politics is essentially reactive in character. It is only when the major parties disagree that the votes of the minor parties become crucial in determining legislative outcomes. This was the case in 1993. The following section provides an overview of the conflict that emerged between the government and the Coalition in the Budget

debates that allowed the minor parties to wield the balance of power.

The conflict that emerged between the major parties over the Budget was a legacy of Labor's fifth consecutive federal election victory in 1993 and the Coalition's fifth consecutive loss. The election had a significant effect on the shape of the Budget and how the Coalition responded to it mind. The Treasurer, John Dawkins, designed the 1993 Budget with two competing

agendas in. On the one hand there was the promised personal tax cuts

39

The Senate the Minor Parties and the 1993 Budget

outlined in the One Nation statement and legislated for in 1992. 2 The ALP promised to honour Keating's 'L.A.W.' tax cuts throughout the 1993 election in an effort to distinguish Labor from the Coalition and its imposition of a

new tax in the form of the Goods and Services Tax. For Keating, then, these tax cuts were not negotiable. At the same time, John Dawkins, as Treasurer, remained committed to addressing the problem of the Budget deficit. It was these twin concerns that Dawkins and the Treasurer's office had to deal with in the 1993 Budget (Harris, 1996). The problem was that if personal income tax cuts were to be introduced, revenue needed to be collected from other sources and/or a reduction in government outlays was required. It was this balancing act that Dawkins concentrated on in the lead up to the 1993 Budget.

The promised tax cuts were directed towards middle income earners, specifically affecting people whose incomes fell between $20 700 and $50 000 per annum. For those whose income was less than $23 200 there was a cash rebate of $100. In the Budget speech Dawkins claimed that these tax cuts would be paid for by higher profits from government businesses and increased levels of economic activity (House of Representatives, 1993, p. 55). In spite of this rhetoric, the bulk of the tax cuts were paid for by new revenue raising measures, including wholesale sale tax increases, increases in tobacco, wine and fuel taxes, a new tax on lump sum payments for leave, and a widening of the Fringe Benefit Tax (FBT) (PRS, 1993, pp. 1-2; Australian Financial Review, 1993a; Australian Financial Review, 1993b; Willox, 1993a). For a summary of the Budget measures see table 3.3.

40

The 1993

Budget: Setting the Scene

Table 3.3: Summary of Budget Measures

• $1.3 increase in indirect taxes fringe benefits tax to include

entertainment and club fees and excessive travel expenses

• rise in petrol tax: 3c a litre immediately; • lump-sum payments of unused annual 5c a litre in mid 1994; 10c a litre increase leave and long-service leave to be taxed in leaded petrol by February 1995 as normal income with exemptions for tax payers over the age of 55

• an increase on the sales tax on wine from • women's pension age to go up to 65 over 20 per cent to 31 per cent 20 years

• all wholesales sales taxes to increase by 1 family allowance income test threshold per cent immediately and a further 1 per down to $60 000 cent by July 1995

• excise on tobacco products to increase by • medicare claims for optometry only for 3 per cent pensioners

• first round of One Nation income tax cuts • austudy for students at home age to start brought forward to November 1993 at 17

• second round of One Nation income tax • a 10 per cent boost in job training

cuts deferred until 1998 programs and an increase of $6 a fortnight

in NewStart allowance

• tax rebate of $100 for those who earn less • childcare cash rebates to apply from July than $23 000 per year 1994. Homecare child allowance as

substitute for dependent spouse rebate to be introduced in September 1994

• Company tax reduced from 39 per cent to 33 per cent

Source: Australian 18 August 1993.

The Treasurer's office always recognised that the Budget would be difficult

to sell (Harris, 1996). Yet the scope of the problems it faced were not predicted. Of crucial importance was the reaction of the labour movement to the Budget. Immediately following the Budget speech Martin Ferguson, ACTU President, was captured on a 7.30 Report Budget Special exclaiming

'It's not for me to defend the indefensible' (Ferguson, 1993) and not long after, the Secretary of the NSW Labor Council, Michael Easson told the media that a number of the Budget measures were an 'act of bastardry on the part of the Government...' (Easson, 1993).

The Coalition's position on the Budget was clearly spelt out two days later when, in the opposition's reply to the Budget, John Hewson, Leader of the Coalition, unambiguously stated that his party would block all tax

41

The Senate the Minor Parties and the 1993 Budget

increases: 'I make it clear that we will vote against these tax increases in

the House and the Senate whenever the government tries to pass them into law.' (House of Representatives, 1993b, p. 361) The Coalition's decision to block the tax increases was a product of the 1993 election. It was felt that the Labor Party had only won the election by misleading the public about the GST and through an ill-conceived promise that it would not increase taxes. The Budget was viewed as an opportunity to bring these points home to the electorate.

With the Coalition committed to blocking significant aspects of the Budget, attention turned to the minor parties and Independent, Brian Harradine, all of whom were cautious in stating their position. Both the Democrats and

the Greens highlighted their concerns about the Budget's impact on low income earners and were critical of the government's income tax cuts which had forced the Labor to seek out alternative, and they argued inequitable, revenue raising measures. The possibility that the minor parties might support the Coalition and block or amend the Budget bills fuelled speculation that the government would enter into negotiations with the Greens and the Australian Democrats to reach a settlement on the Budget (Kernot, 1993a; Chamarette, 1993a; Dawkins, 1993a).

Dawkins' initial reaction to this situation was to assert that there would be no deals done (7.30 Report, 1993) and the comment that 'I am in no mood to negotiate' (Dawkins, 1993b) was one he reiterated in the week following his Budget speech. Yet it soon became apparent that some changes would have to be made to the Budget if it was to have any hope of being passed through the Senate. Not only did pressure come from the minor parties, it was also mounting from within the government's own ranks as ALP backbenchers and the Left of the party expressed concern about the Budget's impact on low income earners and the unpopularity of such measures (Barker, 1993a; Middleton, 1993a). Further compounding the parliamentary Labor Party's problems were increasing levels of dissent from within the labour movement which had continued to grow since Budget night with the suggestion that the Accord between the ACTU and the government was under threat unless the government reconsidered the Budget (Canberra

Times, 1993a; Green et al., 1993).

42

The 1993 Budget: Setting the Scene

The result was that after one week Keating suggested that some changes

might be made to the Budget, but only if they suited the government

(Keating, 1993a). If there was any question about the government's need to

enter into budget negotiations, these were silenced the following day when

a poll was released indicating that the Budget lacked popular support with

74 per cent of those polled, believing they would be made worse off by the

Budget and 62 per cent of respondents believing the Budget would have a

bad effect on the economy. Moreover, the poll showed an 11 per cent drop in

support for Keating as Prime Minister and a 10 per cent reduction in the

ALP's level of support. This was coupled with a 12 per cent increase in

Hewson's popularity and an 8 per cent increase in the Coalition's support

(Tingle, 1993a). It was in this political context, in which Labor's electoral

popularity was declining and the support base of the Party was openly

questioning the government's position, that changes to the original Budget

were ensured. A final pressure was the financial markets which remained

volatile in the face of a potentially blocked budget.

The diminished popularity of the government made it virtually impossible

to bully the Senate into submission. Its main weapon in such a strategy was

the threat of a double dissolution and with such low levels of popularity, it

was difficult to imagine that the government would be willing to force an

election. The result was that Dawkins finally conceded on August 25

(Dawkins, 1993a). His response was to open the Budget to a negotiating

process with the minor parties and Harradine:

...I notice this morning that Senator Kernot, the Democrat, has committed herself to the objectives of the Government's deficit reduction strategy and appears to recognise the importance of the Government's deficit bottom line. Senator Kernot has indicated that she would like an opportunity to provide the Government with comments on the fine details of some of the components of the Governments[sic] package of measures.

The Government, is of course, not averse to receiving the Democrats' views on these matters—on the fine detail of the package, although it must be understood, that there can be no significant change to the Government's overall deficit reduction strategy. The Prime Minister has therefore invited Senator Kernot to meet with him, with me, this

43

The Senate the Minor Parties and the 1993 Budget

evening, to provide her with the opportunity to raise these matters of

detail, and a similar invitation has been made in similar terms to the Senators for the Green party, and also to Senator Harradine (Dawkins,

1993a).

Negotiating for Change in the 1993 Budget

Dawkins' decision to negotiate with the minor parties on aspects of the Budget reflected the reality of the numbers in the Senate: those Budget

measures that the Coalition was committed to blocking could not be passed

without the support of the minor parties. Negotiating to secure the passage

of the Budget bills was therefore a rational strategy for the government to

pursue. In entering into these negotiations, the minor parties were using

their potential to impede government legislation as a means to influence

the government's Budget. It would be wrong, however, to assume that this

negotiating process opened up the whole gambit of policy measures included

in the Budget to the minor parties and their demands. As Dawkins clearly

explained, it was the 'fine detail' of the Budget over which the government

was willing to negotiate. The two main policy concerns of the government,

its deficit reduction strategy and the income tax cuts, were not up for grabs.

The Democrats

The government's consultation process began with a meeting with the Democrats on 25 August which was to be followed by a more comprehensive

meeting on 30 August, the day the Democrats were to outline their position

officially on the Budget. Even before it was brought down, Kernot

emphasised that it was the Budget's equity that the Democrats would be

focusing on:

We've been totally consistent in the past in saying if something is bad law, whether it's a Budget Bill or not, we will look at that, we will look at the equity, we will look at the social impact of the law and we'll vote against it if we think it's a bad idea (Kernot, 1993b).

44

The

1993 Budget: Setting the Scene

Two days after Dawkins' Budget speech the Democrats put forward their

preliminary response to the Budget which included a list of proposed changes. After the Democrats' first meeting with Dawkins a number of other possible changes were floated and their definitive position was produced on the same day that the government revised the Budget (known as the Budget Mark II). The table below summarises each of these stages in the debate.

Table 3.4: Australian Democrats Position in the Budget Negotiations and the Budget Mark II

AD Budget Position August 19 AD alternative Budget measures: Budget Mark II: the (Preliminary response) August 30 (Kernot, 1993c) government's revised Budget

(Keating and J. Dawkins, 1993a)

Double the tax rebate for low income Double the tax rebate for low income Increase the tax rebate for low earners from $100 to $200 earners from $100 to $200 income earners from $100 to

$150

The retrospective nature of new taxes on The retrospective nature of new taxes The retrospective nature of new leave payments to be dropped on leave payments to be dropped taxes on leave payments to be

dropped

Medicare cover to continue to apply to eye Medicare cover to continue to apply to Medicare cover to continue to tests eye tests apply to eye tests

A reduction in the differential between A reduction in the differential leaded and unleaded fuel from Sc to 2c between leaded and unleaded a litre fuel from 5c to 2c a litre

Defer consideration of the 1995 3c litre rise in leaded petrol until the following year and making approval conditional on demonstrated need Fund research and development for lead petrol substitutes Fund a lead abatement strategy

Oppose wine tax; minimum position of Consideration of increased sales tax Measures payed for by delaying phasing in of wine tax increases on wine deferred until 1994 Budget, income tax increases by two

following research into the impact of weeks the changes on the industry

Oppose changes speeding up HECs debt Oppose changes speeding up HECs repayments debt repayments and higher charges

for late completion of degrees Additional Family Payment to Austudy for 16 year olds retained increase by $2 per week per child to compensate for rises in indirect tax

Restore the urban public transport Oppose increase charges for adult literacy courses program

Concern about increasing women's pension age to 65 $94 million incentive package for exporters welcome, but not enough (Kemot I993d) Further measures referred to: August 26 Cap tax cuts at $36 000 p.a. (Ellis, 1993a)

Proposed the abolition of negative gearing (Grose et al., 1993)

45

The Senate the Minor Parties and the 1993 Budget

The Democrats responded to the Government's compromise measures by

releasing a statement claiming 'Democrats inject half a billion dollars of fairness into Budget' taking responsibility for pressuring the government into altering its original Budget (Kernot, 1993e). The Democrats' ownership of the Budget Mark II was accurate to the extent that they played a crucial

role in negotiating for these changes to the Budget and that these changes were directly linked to demands the party had made. Yet they were not the only force shaping the government's action, as pressure from the union movement, within the parliamentary Labor Party and popular opinion all

played an important role. It was the combined impetus of these calls to redress the inequitable nature of the Budget that explains why the government changed tack. The Budget Mark II represented a strategic success for the government. While it was forced to make changes, their

scope was limited (arguably to the fine detail that Dawkins had proposed) yet sufficient to halt the momentum of the popular dissatisfaction. With this package of measures the government secured the support of the union movement, regained internal discipline within the Labor Party and won, in

principle, support from the Democrats for all of its Budget, except the wine

tax increases.

The Democrats managed their response to the Budget Mark II in a skilled manner. Tactically, their greatest achievement was to claim sole ownership of the changes which allowed them to be portrayed as achieving their policy objective of improving the lot of low income earners without ever taking any of the risks associated with directly challenging executive power.

Importantly, the Democrats made sure that their opposition to the Budget could not be interpreted as threatening the government's broad policy objectives and thus labelled obstructionism. This position was established by Kernot early on in the piece when she stated:

We agree.. .with [the] broad thrust of the deficit reduction goal. We have disagreement on how that goal will be reached, particularly with reference to fairness to low income earners and rural Australians (Kernot, 1993a).

The strategy adopted by the Democrats epitomises the need for the minor parties to meet the demands of two competing pressures. On the one hand, the demand to be electorally relevant required the party to be associated

46

The 1993 Budget: Setting the Scene

with a policy role. On the other hand, responsible government placed

considerable restraints on the Democrats as the convention assumes the continuing primacy of the government in dictating the country's policy direction. The Democrats' response to, and ownership of, the Budget Mark

II, was a slick means to balance out these competing demands, undermining neither its own policy goals or the government's control over the broad policy agenda.

The Greens

The Greens took a different approach to the Budget Mark II. In a similar fashion to the Democrats, the Greens established that their major concern regarding the Budget was its equity implications. By the time that the modified Budget was released, they had publicly indicated that the party

opposed a number of specific measures, including the elimination of the optometry rebate in Medicare, petrol and wholesale sales tax increases, and the hike in sales tax on wine (Barker and Willox, 1993a). While the Budget Mark II went some way to addressing these concerns, the Greens argued it

did not go far enough. Instead they asserted that

We are pleased but not yet satisfied. We consider the changes are generally positive, but we will consider the equity implications of the overall package before making a final decision (Chamarette and Margetts, 1993a)

Exactly what the Greens were going to demand from the government remained unclear although they maintained their intention to place pressure on the Government to lessen the Budget's impact on the Budget's low income earners (Peake, 1993a; Millett, 1993). Giving weight to the

Green's position was the Treasury's Prismod economic model, which, in the days after the modified Budget had been released, identified that the impact of the Budget would be disadvantageous for low income earners (Garran, 1993a).

The Greens' failure to support the Budget Mark II led to further negotiations between the Greens and the government on 3 September. At this time the Greens presented Dawkins with their ideas on possible

47

The Senate the Minor Parties and the 1993 Budget

alternative budget measures. These are summarised in table 3.5 along with

Green and Treasury costings.

Table 3.5: Green (WA) Inc Proposed Changes to the Budget

Proposed Budget Changes

Government Costing Greens' costings

No. Measure 93-4 94-5 95-6 96-7 93-4 94-5 95-6 96-7

.Revenue measures

1 Increased marginal tax rate 120 220 240 270 88 148 153 159

above $100,00 by 5% from November 15 2 Company tax increase to 36% 0 160 930 1000 165 930 820 850

from October I, 1994 3 Defer sales tax on wine pending -70 -95 -105 -110 -70 0 0 0

inquiry

4 Limit wholesale sales tax to I % 0 0 -580 -673 0 0 -604 -673

(drop increase from July 1995) 5 Drop taxation of credit unions 0 0 -25 -3 0 0 -25 -30

6 Increase low income tax rebate 0 -200 -195 -190 0 -85 -83 -80

from $150 to $200 a year

Source: Australian 11 September 1993.

48

The 1993 Budget: Setting the Scene

The proposals that the Greens put to the government were far-reaching and

the Treasurer responded by rejecting them all. In a letter to the Greens, Dawkins explained the reason for this:

The overall effect of your proposals would have a significant impact on the deficit. But more than this, the approach underlying your proposals is very much at odds with the Government's economic and social strategy (Dawkins, 1993c).

Dawkins continued by explaining that Labor had previously introduced tax

cuts to business to encourage business investment. To reverse this decision, as the Greens had suggested (measure 2), would be to undermine one of the fundamental features of Labor's economic strategy. The possibility of

raising levels of income tax (measure 1) was dismissed as an issue that might be considered at a later date. With both these measures abandoned the revenue base of the Greens' alternative Budget was eroded.

Furthermore, the spending cuts suggested by the Greens were rejected.

Dawkins argued that the major one, a cut in real terms to the defence Budget (measure 7), was incompatible with the government's recent review of expenditure and on this basis, as well as its employment implications for service personnel, was unacceptable. It would therefore be impossible for the government to fund expenditure increases without them having a

detrimental effect on the deficit reduction strategy (Dawkins, 1993c).

The Greens responded to the government's rejection of their measures by arguing that:

As it stands the Budget is not one which anyone with a concern for social justice can support. The Government's unwillingness to respond to any of our requests for a change indicates a profound disrespect for the plight of hundreds of thousands of Australians (Chamarette and Margetts,

1993b).

They contended that a 3 billion dollar hole in the government's deficit

reduction strategy had been identified and that equity issues had been insufficiently addressed within the Budget Mark II. Thus the Greens position would be as follows:

We will seek to amend the Budget to remove the second 1 per cent increase in Wholesale Sales Tax, scheduled for July 1995. Removing the

49

The Senate the Minor Parties and the 1993 Budget

second increase in the Wholesale Sales Tax would not only reduce the

inequitable impact of the Budget, but would also reduce its inflationary effect. Other measures, such as increasing the tax rebate, would be worthwhile but will not benefit those who do not pay tax or receive social security benefits (Chamarette and Margetts, 1993b).

In some respects, the Greens' approach to the Budget involved a significant

and overt challenge to executive power. By demanding that the government

make changes to the Budget or else risk the removal of an important aspect

of its revenue raising measures, the Greens left the impression of a minor

party attempting to exert enormous influence over a government budget.

This image was reinforced by the sorts of policy proposals put to Dawkins

by the Greens in their alternative budget. There is a need, however, to

temper this interpretation. While the Greens were willing to raise the

stakes considerably higher than the Democrats, their main policy demand

was the same: to make the Budget more equitable. It is also worth pointing

out that the Greens did not dictate to Labor the appropriate form that

government action ought to take. As the following statement explains:

We made it clear that the measures put forward were to illustrate a strategy for achieving the Government's objectives in a more equitable way. While we considered all of the measures worthwhile, we were not wedded to any particular element of the package. We were also happy to discuss any alternative measures to improve the revenue base and lessen the inequitable impact of the Budget (Chamarette and Margetts, 1993b).

For the government this failure to present a 'bottom line' (Kingston, 1993a)

was more difficult to deal with than being given a precise demand. Yet this

approach moderated the challenge to executive power that was taking

place, at least to the extent that the Greens offered the government greater

control over the policy agenda than might have otherwise been the case. In

general, however, the question of how the Greens would respond to issues

relating to governability remained unclear. As the following statement by

Dee Margetts indicates, the boundaries to the Greens actions in the Senate

were not clear:

HELEN DALLEY: So are you absolutely guaranteeing you won't block the Budget and force a double dissolution?

50

The 1993 Budget: Setting the Scene

DEE MARGETTS: At this stage, it's not our intention to do that. It's never been our intention to block the Budget per se but the Budget, it consists of a whole lot of pieces of legislation from now until December-the major package we don't even know whether it's amendable or whether it's possible to send it back to the committee. So, in terms of blocking the Budget, what we're doing is trying to use the Senate process in the way it was designed to be, to make sure that there is a consultative process and that the Budget can go through in a way that is perhaps workable in that now it isn't (Margetts, 1993a).

Margetts' assertion that the Greens did not intend to block the Budget was

interpreted by the press as an exclamation that the Greens would not block

the Budget. Margetts later explained that there was a significant

distinction to be made and that 'we have never said never', going on to

explain that the Greens hoped their attempts to make amendments to the

budget bills would be accepted by the government in the House of

Representatives (Taylor, 1993). Exactly how the Greens would behave

remained to be seen.

Conclusion

Although the minor parties had similar policy concerns, their approach to the Budget negotiations differed considerably. The Democrats were quick to

take advantage of the Budget Mark II and their role in getting the

government to make concessions. This reflected the cautious approach the

party adopted when it came to threatening the government's control over

policy issues. The Greens, by way of contrast, were far more willing to

challenge executive power. Nonetheless, their approach demonstrated some

reservation about taking this too far. Neither of the minor parties

threatened the broad policy goals of the government; accepting that its

commitment to income tax cuts and a deficit reduction strategy was not

open to bargaining. Both tended to focus on the vague demand to improve

the position of low income earners. The Greens, however, were willing to

push this point further than the Democrats and made the very specific

threat that the second round of wholesale sales tax increases would be

51

The Senate the Minor Parties and the 1993 Budget

placed in jeopardy unless the government did something to make the

change in the tax regime more equitable.

Endnotes

With a quorum of one third of the chamber present.

2. Hence Keating's claim that these tax cuts were L.A.W. law'.

52

Chapter 4: Analysing the 1993 Budget

Introduction

The central theme of this monograph is how the minor parties have responded to their ability to challenge executive power. The following chapter aims to provide, through a quantitative analysis of the minor parties' voting patterns, a picture of the extent to which they were willing to undertake such a challenge during the 1993 Budget debates. It identifies three main ways that the minor parties sought to influence the legislative process. First, by opposing government-initiated motions; second, by supporting opposition motions; and third, by initiating their own motions or supporting those of another minor party.

It is only when the major parties are in conflict with each other that an opening appears for the minor parties to wield the balance of power. The role played by the minor parties in responding to the 1993 Budget bills reflected this fact. Although the adversarial nature of the relationship between the major parties means that this frequently occurs, it also suggests that it is limited to those in which the major parties have set the political and policy agenda.

53

The Senate, the Minor Parties and the 1993 Budget

Major Party Initiated Motions

The major parties initiated most (91 per cent) of the motions in the 1993 Budget debates. With divisions required for just over one third of decisions (31 per cent or 46 of 148 motions) this left the minor parties holding the balance of power, and thus capable of determining the success or failure of government and opposition actions on these occasions.' Of these, Labor initiated 44 and the Coalition 91 motions. See Table 4.1

Table 4.1: Motions Initiated by Major Parties and Levels of Success

Total Success

No. % No. success rate % % of successful

motions

ALP 44 30 43 98 51

COAL 91 61 34 37 40

AD 8 5 6 75 7

GWA 4 3 0 0 0

Harradine (IND) 1 1 1 100. 1

Figure 4.1: Motions Initiated by Parties and Levels of Success

100

ill_H_Il_H

9080700 80 ®Total nSuccess 50d 40 z ^302010`ALP COAL AD GWA Harradine (IND)Party 54

Analysing the 1993 Budget

Of the 44 motions initiated by Labor Senators, all were successful except

one, suggesting that support for government motions was extremely high.

In the thirteen divisions that were required to decide the fate of government motions, the minor parties supported the government on average 88 per cent of the time with the Democrats backing 100 per cent of government motions and support from the Greens sitting at 77 per cent. All of the amendments (two) that the government made to its own legislation had sufficient levels of support not to require divisions.

Table 4.2: Party Support for Major Party Initiated Motions

ALP COAL

No. % No. %

Total motions 44 91

Success 43 98 34 37

Divisions 13 33

Success 12 92 11 33

Frequency ALP 13 100 0 0

of support COAL 0 0 33 100

(in divisions) Harradine (IND) 9 69 18 55

AD 13 100 5 15

GWA 10 77 10 30

55

The Senate, the Minor Parties and the

1993 Budget

Figure 4.2: Party Support for Major Party Initiated Motions (no.) in Divisions

35 1

E 30 _ 25

®ALP i

n COAL

c 20J

_Iiiiiit

a aw 15- O 10-EZ 510 --;ALP COAL AD GWA Harradine(IND)PartyFigure 4.3: Party Support for Major Party Initiated Motions (%) in Divisions 56

Analysing the

1993 Budget

The Coalition moved more than twice the number of motions initiated by

the government but their rate of success was much lower with a total of 35 motions (38 per cent) winning support from the Senate. 33 Coalition motions (36 per cent) required divisions and of these only one third were passed. Minor party support for Coalition motions was much lower than it had been for the government, at an average of 33 per cent. The Democrats backed only 15 per cent and the Greens 30 per cent of Coalition motions.

Overall, the minor parties supported the government with a greater frequency than they did the Coalition. Divisions were more often required for Coalition motions and when divisions were called, the government was far more successful. This is true for both the Democrats and the Greens, but

more pronounced with the Democrats.

Minor Party Initiated Motions

The minor parties initiated only 8 per cent of motions to change the 1993 Budget bills. When they did initiate motions the Democrats were successful 75 per cent of the time while the Greens did not initiate one successful motion which is an average of 50 per cent. When there was a division over a minor party initiated motion the Greens and the Democrats supported each

other on all occasions. Harradine supported two of seven Democrat motions and none moved by the Greens. Labor did not support any of the minor party's motions in divisions while the Coalition supported all but one of the Democrats' motions. See table 4.3 for details.

Table 4.3: Party Support for Minor Party Initiated Motions

AD GWA

No. % No. %

Total motions 8 4

Success 6 75 0 0

Divisions 7 2

Success 6 86 0 0

Frequency of ALP 0 0 0 0

support COAL 6 86 0 0

Harradine (IND) 2 29 0 0

AD 7 100 2 100

GWA 7 100 2 100

57

The Senate, the Minor Parties and the 1993 Budget

Table 4.4 provides a summary of the motions initiated by the minor parties.

It makes a distinction between motions that are related to the operating procedures of the Senate, described as 'process' motions, and those, directed towards altering the composition of a bill's policy measures. As chapter one

noted in its discussion of non-governing parties' influence in the legislative process, the distinction between issues of policy and process (i.e. review) may at times be ambiguous. The basis for this classification is the form of the motion and its intention, as revealed in the Senate debates. Table 4.4 demonstrates that the bulk of minor party motions were amendments that had policy aims as their main concern. It also reveals that while the main policy issue addressed by the Democrats in the Budget debates was the wine tax, the Greens covered a broader variety of policy areas.

Table 4.4: Motions Initiated by Minor Parties

Party Bill Motion Type Purpose Classification Division Outcome

AD Omnibus Bill Procedural Tabling of legal process Yes success

Motion document regarding the bill's constitutionality

Sales Tax (Customs) Amendment Condemn wine tax policy Yes success

Sales Tax (Excise) Amendment Condemn wine tax policy Yes success

Sales Tax (General) Amendment Condemn wine tax policy Yes success

Sales Tax (In Situ Amendment Condemn wine tax policy Yes success

Pools) Sales Tax Assessment Amendment Condemn wine tax policy Yes success

Amendment Taxation (Deficit Amendment retain mutuality policy Yes failed

Reduction) No. I Taxation (Deficit Amendment omit paragraph to process No failed

Reduction) Bill No 2 deplore the test case bill

GWA Excise Tariff Amendment Make explicit policy Yes failed

commitment to environment

Excise Tariff Amendment Exempt the indexation Policy No failed

of the excise as well as its increase

Customs Tariff Amendment Attaching conditions to Policy No failed

ensure that it is an environmental measure

Taxation (Deficit Amendment Increase income tax for policy Yes failed

Reduction) No. 3 those earning over $100

000 p.a.

58

Analysing the 1993 Budget

In the Senate debates over the 1993 Budget the number of motions initiated

by each of the parties was close to their numerical representation in the Senate. As table 4.5, figure 4.4 demonstrates, across all parties there was an equivalence between levels of party representation and the percentage of

motions put. The skewing that did occur was associated with the major parties, with the Coalition initiating more (up 14 per cent) and the government initiating less (down 9 per cent) than their levels of representation. This is only to be expected as the government is not likely to initiate many amendments to its own bills and therefore tends to be restricted to moving routine motions associated with the legislation's passage through the Senate. Levels of representation and motion initiation was neatly matched for both the Greens and Harradine, while the number

of motions initiated by the Democrats was slightly down (4 per cent lower than their level of representation). When it came to levels of successful motions the trends were reversed for the major parties with the government initiating a greater percentage of motions than its level of representation and the Coalition a lower percentage. The Democrats level of successful motions rises although it still remains below their level of representation and they were joined by the Greens. Harradine's position was constant.

Table 4.5: Level of Congruence between Senate Representation, Motions and Success in the Legislative Process

Motions Senators

Total (%) success (%) %

ALP 30 51 39

COAL 61 41 47

AD 5 7 9

GWA 3 0 3

Harradine (IND) 1 1 1

59

The Senate, the Minor Parties and the 1993 Budget

Figure 4.4: Level of Congruence between Senate Representation, Activities

and Success in the Legislative Process

Minor Party Responses to Executive Power within the

Legislative Process

In total the minor parties opposed the executive on 36 out of a possible 110 occasions. 2 The picture that can be painted when they wielded the balance of power is as follows. The Democrats challenged the government less

frequently than the Greens supporting every government motion and only five (15 per cent) Coalition motions, while the Greens voted against the government on three occasions (23 per cent) and for the Coalition ten times (30 per cent). Both the Democrats and the Greens supported all minor party motions for which a division was called (nine of nine). The Greens initiated four motions, two of which required divisions. The Democrats initiated eight motions, seven required divisions and six were successful.

60

Analysing the 1993 Budget

Table 4.6: Minor Party Responses to Executive Power within the Legislative Process

Level of support AD GWA

Major party motions

Oppose no 0 3

government % 0 23

Support no 5 10

opposition % 10 30

Total no 5 13

% 11 21

Minor party motions

Support no 7 7

AD % 100 100

Support no 2 2

GWA % 100 100

Total no 9 9

100 100

Total: sum of responses to major party and minor party motions

no 14 22

% 25 40

Figure 4.5: Minor Party Response to Executive Power within the Legislative Process

25 -

20

0

15 ©oppose government

E

I E support opposition

q support minor parties

zo 10 -

q Total

:L1

AD GWAParty

61

The Senate, the Minor Parties and the 1993 Budget

Figure 4.6: Minor Party Response to Executive Power within the Legislative

Process

Minor Parties

oppose government - 8%

support minor c-

I -

support

parties

opposition

50% 42%

Conclusion

The impression the data presented in this chapter leaves is one in which the challenge posed by the minor parties to the executive over the 1993 Budget through the legislative process was limited in its nature. The points of comparison here are the number of motions initiated by each of the parties and the willingness of the minor parties to vote against the

government. 3 This suggests that the influence of the minor parties is frequently distorted by the press and the major parties. Even in the height of the 1993 Budget conflict, the number of occasions when the minor parties

challenged the Executive was far more restricted than the opposition. The following two chapters takes this theme further by analysing how each of the minor parties responded to different sorts of opportunities to challenge executive power. In line with the framework established in the first

chapter, a distinction is made between instances in which the policies of the government were challenged and those more closely aligned to notions of legislative scrutiny and review. A third category discusses those instances where the minor parties initiated motions that they knew would fail.

62

Analysing the 1993 Budget

Endnotes

1. A reading of the Senate debates suggests that this number is a low estimate, as many of the decisions that were made without division had the government and opposition voting against each other. For the purpose of this analysis only those instances in which there was a division have been counted to ensure consistency.

2. This calculation is based on the number of instances in which each minor party might have voted against the government. Thus it is a total of 55 x 2 which equals 110.

3. It is recognised that to do a comprehensive analysis of the extent to which the minor parties were willing to challenge the executive, it would be necessary to compare this to other examples of voting patterns of the parties when legislation passes through the Senate. This, however, is beyond the

scope of this project.

63

Chapter 5: The Sales Tax Bills

Introduction

The purpose of this chapter is to analyse how the minor parties responded to those bills that contained the government's proposed sales tax increases

as they passed through the Senate. It was these bills that the government

had most difficulty passing through the Senate and for both the Democrats

and the Greens, involved their most substantial challenge to executive

power on policy issues.

Sales Tax (Customs) (Deficit Reduction) Bill 1993, Sales

Tax (Excise) (Deficit Reduction) Bill 1993, Sales Tax

(General) (Deficit Reduction) Bill 1993

Three sales tax bills were at the centre of contention in the 1993 Budget debates: the Sales Tax (Customs) (Deficit Reduction) Bill 1993, Sales Tax

(Excise) (Deficit Reduction) Bill 1993, and the Sales Tax (General) (Deficit

Reduction) Bill 1993. The purpose of these bills was to legislate for an

increase in the level of sales tax imposed on wine and cider and for two 1

65

The Senate, the Minor Parties and the 1993 Budget

per cent increases in the general level of sales tax. Five bills, in total, were

introduced to ensure that s. 55 of the Constitution, which allows only one measure of taxation to be dealt with in any individual bill, was not breached. Sales tax may come in three different forms, customs, an excise duty or as a tax. Each of the Bills dealt with these different circumstances.

Table 5.1 sets out the chronology of events influencing the progression of these bills through the Senate.'

5. 1: The Sales Tax Bills: A Chronology

Sales Tax (Customs) (Deficit Reduction) Bill, Sales Tax (Excise) (Deficit Reduction) Bill, Sales Tax (General) (Deficit Reduction) Bill Date Action Moved by Description Ayes Noes Result

Sept 29 First reading Collins (ALP)

Oct 6 Declaratory motion Short (LIB) Not to bind future Senates to Affirmative

the constitutionality of these bills under s. 53 and s. 55 (Senate, 1993a, p. 388).

Oct 7 Declaratory motion Short (LIB) Condemned measures that COAL: 31 ALP: 25 Negatived

jeopardised the wine AD: 7 31:35

industry's future and GWA: 2

increased the burden of IND: I

indirect taxation on the community. (Senate, 1993a, p. 1788).

Amendment to Lees (AD) Condemns the bills impact COAL: 29 ALP: 25 Affirmative

condemn on the wine tax (Senate, AD: 7 IND: 1 38: 26

1993a, p.401). GWA: 2

Second reading Collins (ALP) Affirmative

(amended bill) Request amendment Short (LIB) To omit the paragraph on COAL: 31 ALP: 25 Affirmative

wine tax. AD: 7 IND: 1 40: 26

GWA: 2

Request amendment Short (LIB) Omit first round of wholesale COAL: 30 ALP: 24 Negatived sales taxes AD: 7 30: 34

GWA: 2 IND:

Request amendment Short (LIB) Omit second round of COAL: 31 ALP: 25 Affirmative

wholesale sales taxes GWA: 2 AD: 7 34: 32

IND: I

Oct 8 Greens threaten to block sales tax bills, rather than to amend them, unless the inequitable nature of

wholesales sales tax were addressed (Kingston, 1993b).

Oct 14 The government does a deal with the large wine industry organisations on the wine tax and the

Democrats agree to support the government's legislation (Lees, 1993).

Oct 15 Greens confirm their threat to block legislation in a letter to Keating.

Oct 19 Greens meet with Keating and accept a $144 million compensation package for low income earners offered. As a result of this meeting they also back down on their threats on the wine tax (McKenzie, 1993b; McKenzie, 1993d; Peake, 1993c; Chamarette and Margetts, 1993c). Procedural: not to McMullan ALP: 24 COAL: 30 Affirmative

press requests (ALP) AD: 7 34: 30

rejected by the House GWA: 2

of Representatives IND: I

Oct 20 Third reading Faulkner (ALP) ALP: 24 COAL: 30 Affirmative

AD: 7 34: 30

GWA: 2 IND:

66

The Sales Tax Bills

The Democrats

The Democrats' involvement in Senate debates over the Budget bills was restricted from the outset. The party had already given its support to the Budget Mark II which meant that the only policy area left for the Democrats to challenge was the wine tax increases. Further inhibiting the Democrats' behaviour was the power of their vote. In any vote over the Budget, Democrat support for the Coalition automatically defeated the government. While this gave the Democrats considerable power, it also meant that they could only vote against the government when the party was serious about defeating it. 3 This limitation was partly reflected in the Democrats response to the Budget bills where they voted against the government on 14 out of 55 opportunities (25 per cent) which was far less often than the Greens (40 per cent) whose support did not guarantee the defeat of the government.

The focus of the controversy over the wine tax was the government's proposal to increase the tax from 20 per cent to 31 per cent. According to the Democrats, it was the size of the increase that the party objected to (Senate, 1993b, p. 1836) and that the wine tax was a poorly conceived revenue raising strategy that could not be sustained by the industry

(Senate, 1993b, p. 1838). As such it was an irrational policy, one that would hurt a burgeoning export industry:

I do not just stand here and say that we are opposed to taxation increase of any kind, but I think the government has failed to make out a cohesive rationale based on industry policy (Kernot, C. in Senate, 1993, p. 1817).

For a model of good policy the Democrats drew on the government's own initiatives like the Button car plan. They proposed that the government enter into negotiations with the wine makers and work towards a more appropriate policy response to the issue. Having identified these problems with the legislation, the Democrats voted to omit the wine tax from the

sales tax bills in which they were located.

The government was well aware that it would be unable to stop the Senate from amending the wine tax out of the Budget unless it could get the Democrats on side. As this looked unlikely Dawkins toyed with the idea of

67

The Senate, the Minor Parties and the 1993 Budget

by-passing parliament and imposing an excise on wine in the place of the

tax. The attraction of this strategy was that excises may be levied for 12 months prior to parliamentary approval and thus the government could continue to collect the revenue without an act of parliament, at least in the short term (McKenzie, 1993a). The Democrats reacted angrily to this proposal describing it as 'wanton vindictiveness' (Kernot, 1993f) and in the process suggested that the party was not going to be bullied by the

government. 4 Although the Democrats were willing to defy the government when it resorted to intimidatory tactics, they were quick to come out in support of an agreement between Winemakers Federation, the Independent Wineries Association and Grapegrowers Council of Australia. This deal involved a compromise package in which the industry accepted tax increases, but at a slower rate and with a limit of 26 per cent being placed on the tax prior to an industry inquiry. With the major wine industry representatives satisfied, the Democrats agreed that they would support the government's negotiated legislation (Lees, 1993).

The wine tax issue was a question of policy but one that did not pose a significant threat to the executive's control over the legislative agenda. The Democrats did not question the executive's right to determine the broad parameters of policy, jeopardise the Budget's policy direction or

significantly undermine the government's revenue raising capabilities; all examples of what might be associated with an extensive challenge to governmental power. While it is possible to characterise the Democrats' position on the wine tax as one that sought to achieve a policy outcome consistent with the party's advocacy of an activist industry policy, their policy prescription was still couched in terms consistent with the

government's policy objectives, rather than their own. Thus it was government examples of industry policy that the Democrats pointed to as examples of a rational approach to policy making.

In addition to having a policy dimension, the approach that the Democrats brought to the wine tax issue may also be related to their role in the detailed scrutiny of legislation. As Kernot explained on Budget night,

scrutiny was a crucial part of her party's agenda. Accordingly the Democrats would:

68

The Sales Tax Bills

examine it [the Budget] on its merits; look at the detail; if its bad law,

say it's bad law and take appropriate action; if it's a good law, vote for it ...If it is necessary, request... make an amendment by request to the House of Representatives (Kernot, 1993g).

As far as the Democrats were concerned, scrutiny of the proposed wine tax increases revealed that changes to the tax regime and its implications had not been sufficiently taken into account. If this were true then it was a 'bad

law' and within the ambit of the review process. As the Democrats were willing to amend the wine tax increases out of the sales tax legislation it is possible to argue that in this instance they were willing to take issue with the executive in a rigorous fashion because it was linked to their role in the review of legislation.

The Democrats' decision not to oppose the second round of the wholesale sales tax increases reveals much about the way the party viewed its role in the Senate and the forces at play when the party side stepped an opportunity to challenge executive power. From the beginning of Senate debate on this question, the Democrats' deal with the governments on the wholesale sales tax increases in the Budget Mark II restricted the strategies available to the party. Their position in parliamentary debates, however, did not focus on the deal done but on the question of what policy concerns were outside the sphere of legitimate minor party interference.

Instead, the Democrats emphasised the fact that both rounds of wholesale sales tax increases were crucial to the government's revenue raising efforts.

To reject them would have fundamentally altered the government's ability to achieve its deficit reduction strategy without making a significant reduction in its outlays and thus compromising on a policy priority of some sort (Senate, 1993b, p. 1901). The position adopted by the Democrats was, as Kernot explained, one in which the government's Budget, and its broad policy direction, would not be undermined. Thus the Democrats, through Kernot, argued:

These [the wholesale sales tax increases] are not our priorities; they are this government's priorities within the parameters of a straitjacket of its own making. Nevertheless, the final shape of the Budget is its prerogative, and it will live with the consequence. The Democrats' derive some satisfaction from being able to inject fairness into the original

69

The Senate, the Minor Parties and the 1993

Budget

Budget proposals, and I think it shows that minor parties can make a

significant contribution and can achieve significant change.

Beyond that, we respect the government's right to govern and to make the tough decisions on how the Budget shapes up. If it were up to us, we would have done it differently (Senate, 1993b, p. 1818).

In this speech Kernot sketched out the balancing act performed by the

Democrats in pursuing their own policy agenda whilst accepting Labor's right to government. It confirms the notion that the Democrats sought to change the Budget whilst maintaining the government's right to determine the broad parameters of policy. Put simply, when it came to wielding the balance of power on policy issues, the Democrats were extremely cautious in their approach as they sought to ensure that their actions could not be interpreted as undermining governability. Had the Democrats been seen as obstructing the Budget, or forcing the government to a double dissolution election, the negative fall out could have been significant and potentially undermined their position as balance of power holders. The experience of the Democrats in the Senate had sensitised them to this possibility and thus they sought to accommodate their need to be viewed as playing an active role within the Senate without opening up the party to claims of obstructionism.

The above discussion points to the continuing influence of responsible government in establishing boundaries that restrict the Democrats' behaviour in the Senate. There is more to the story than this, however, as the Democrats' approach to the Budget also needs to be viewed as a part of a specific electoral strategy designed to redress ° the party's poor performance in the 1993 federal election. In an election campaign dominated by the GST, the Democrats struggled to raise their profile, resulting in the party winning only two Senate seats compared with five in

1990, reflecting much lower levels of electoral support and leaving the party with a total of seven Senators (see table 5.2). A similar outcome in the next federal election would have placed the party on the brink of electoral obscurity. The Democrats' support was being eroded on two fronts. On the one side there was the Labor Party which had effectively used popular concern about the GST to recapture support from some Democrat voters

(Kernot, 1993h). On the other, there was the Greens whose core

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The Sales Tax Bills

constituency was similar to that of the Democrats: middle class,

environmentally aware voters with a particular concern for social justice.5 Further compounding the party's problems was an inappropriate electoral strategy that had almost exclusively concentrated on the environment in a campaign dominated by economic issues.

Table 5.2: Levels of Minor Party Support in the Senate: 1990-1993

Seats % of vote

1990 1993 1990 1993

AD 5 2 12.6 5.3

GWA 1 1 2.8 2.9

Not long after the 1993 election Cheryl Kernot was elected as the new

leader of the Australian Democrats. Kernot responded to the Democrats' poor performance by embarking on a three point strategy that aimed to regain its electoral support. To make the Democrats attractive to those voters who had turned from the party to Labor in the 1993 election, Kernot

sought to establish the view that the Democrats had a sound policy position on economic issues. Such an approach would ensure that they would not be marginalised in campaigns where the main debate was over economic policy. This explains why it was so important for the Democrats to be seen

as having a policy agenda when it came to the 1993 Budget. The Democrats involvement in the Budget Mark II met this need as the party was clearly taking an active role in policy debates, championing questions of equity.

A second dimension of this strategy was to renew support for the party by identifying its unique role in the review process. This was directed towards highlighting the central role played by the Democrats in keeping the government to its election promises and in making them accountable to

both parliament and the wider public should they stray from such promises.

As Kernot pointed out to the National Press Club this was an electoral

strategy:

We know that many voters deserted us for the Labor Party this time in the not unreasonable fear of seeing the shop run by a bunch of cold-blooded economic rationalists. These voters will return to us when Labor

71

The Senate, the Minor Parties and the 1993 Budget

reveals, as it has already begun to do, the deep abyss between its pre-election rhetoric and its post-election pragmatism (Kernot, 1993h).

Such an emphasis on the Democrats' role in 'keeping the bastards honest' is not surprising considering that it has long been associated with the Democrats' success as a minor party.

The third component of the Democrats' strategy used the notion of responsible government to the party's advantage. The aim was to construct an image of the Democrats as wielding the balance of power in responsible fashion (Kernot, 1993h; Kernot, 1993c). One of the problems that the Democrats faced with the arrival of the Greens was another party with a policy orientation that was extremely close to their own, so close that the possible merger of the two parties had been touted in the lead up to the

1993 election. At a time when the Democrats' support was waning the Greens figured as a significant electoral threat. With the two parties having a similar policy outlook, the most effective way that the Democrats could argue they were unique was by identifying their special value in the Senate. Kernot explained this point just prior to Budget night:

...when you look at the'issues, we [the Greens and the Democrats] have a lot in common and I think that we will have to work on those issues. But the fact of the matter is... that the Democrats are not fundamentalists, we're not uncompromising (Kernot, 19931).

When the Democrats supported the government in the Budget Mark II, while the Greens maintained their opposition, the Democrats had the perfect opportunity to further the notion that they were responsible balance of power holders. They continued to drive the point home, from the time of

the Budget Mark II on, by repeatedly calling for an end to the Budget conflict, arguing that the time for deals was over and that certainty must be returned (Kernot, 1993j).

As the debate over the Budget saw the Greens vote with the Coalition and eliminate the second round of the wholesale sales tax, the Democrats used this situation to draw attention to their approach to the balance of power and to reinforce the argument that the Democrats behaved responsibly in the Senate while the Greens did not. The Democrats' argued that the

Greens were being used by the Coalition in its adoption of an obstructionist

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The Sales Tax Bills

approach to the Budget. Take, for instance, the following statement made

by Kernot in the debate over this bill:

... What we are arguing about is how we do it and who has the right to do it. That is where the Democrats and the opposition really differ. It comes down to our view about the legitimate role of the Senate. Is it a house of review? Is it a house of government? Where do our rights begin and end?

Are 1550 votes considered to be a mandate? Is winning the election a mandate? Who has the right to dictate the economic direction of this country? Is it our right? If we want to take on that right, why do we not face an election every three years, as the House of Representatives does?

... What this [the Coalitions approach to the Budget] is really about is gutting a budget and being obstructionist. It is about taking every opportunity possible to maybe crack the big one, get a double dissolution and go to an early election to have another go at the one those opposite did not win.

...I argue that the Budget is not the be all and end all of our opportunities to inject equity in the name of low income earners. As each piece of legislation is presented to us we have an opportunity to amend it. We have done that and will continue to do that (Senate, 1993b, pp. 1900-1902).

While in one sense Kernot's argument is about the limits placed on the non-governing parties in the Senate, including her own speech, it can also be

interpreted as part of a strategy in which the rhetoric of responsible

government was being used by the party to pursue their interests.

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The Senate, the Minor Parties and the 1993 Budget

Table 5.3: Australian Democrats Response to Executive Power within the Legislative Process

Bill Motion Type Purpose Classification Outcome

Sales Tax Amendment Omit wine tax Policy Success

(Customs)

Support Sales Tax (Excise) Amendment Omit wine tax Policy Success

for Coalition Sales Tax Amendment Omit wine tax Policy Success

motions (General)

Taxation (Deficit Amendment Remove link between Process Success

Reduction) No. 3 income tax cuts and i

other budget bills.

Taxation (Deficit Procedural Tabling of legal Process Success

Reduction) Bill opinion regarding the

(Omnibus bill) constitutionality of the

bill.

Omnibus Bill Procedural Tabling of legal s process success

Motion document regarding

the bill's constitutionality

Sales Tax Amendment Condemn wine tax I policy success

(Customs)

Support for Sales Tax (Excise) Amendment Condemn wine tax policy success

own motions Sales Tax Amendment Condemn wine tax policy success

(General) Sales Tax (In Situ Amendment Condemn wine tax policy success

Pools) Sales Tax Amendment Condemn wine tax policy success

Assessment Amendment Taxation (Deficit Amendment retain mutuality policy failed

Reduction) No. 1

Support Excise Tariff Amendment Make explicit policy failed

for Green commitment to

motions environment

Taxation (Deficit Amendment Increase income tax policy failed

Reduction) No. 3 for those earning over

$100 000

The Greens

There were a number of differences between the context in which the Greens approached debates on the 1993 Budget bills and that which shaped the Democrats' response to the situation. First, there had been no deal done between the Greens and the government and not surprisingly, the Greens

74

The Sales Tax Bills

went into the Budget debates seeking to achieve a wider range of policy

outcomes than the Democrats. Second, while the Democrats had been able to defeat the government by simply supporting the Coalition, the Greens could only effect voting outcomes in specific situations. The scenarios in which the Greens held the balance of power were:

• in government efforts to pass legislation, the Greens shared the balance of power with the Democrats

• in government attempts to block amendments the Greens shared the balance of power with the Democrats

• in opposition attempts to amend legislation the Greens shared the balance of power with Harradine

• in opposition attempts to block legislation the Greens wielded the balance of power in their own right.

This meant that when the Coalition initiated amendments to the Budget, the Greens did not have the numbers to ensure their success, giving the Greens less power than the Democrats in Senate decision making, but greater freedom to vote with the Coalition on their motions as this did not

automatically lead to the defeat of the government.

Third, the Greens had not devised their electoral strategy around being presented as responsible balance of power holders. Indeed, there was considerable uncertainty about how the Greens would behave in the Senate.

They were an untried force, never having held the balance of power before.

It was to the Greens advantage to keep their options open as it gave them the ability to respond to developments in the Senate as debates arose and their ability to shape events became clearer. For a party in a position of wielding the balance of power for the first time, especially over such a highly charged issue like the Budget, such flexibility was extremely useful.

While these conditions meant that the Greens had greater freedom than the Democrats to oppose government policy in the Senate debates over the Budget, is sensitised them to the need not to threaten governability too greatly. For example, on Budget night Chamarette responded to a question

75

The Senate, the Minor Parties and the 1993 Budget

on the 7.30 Report regarding the likelihood that '... important sections of the

Dawkins Budget being rejected by the Senate...' by replying:

I think that is very very unlikely. It is certainly not going to be coming from the Greens. What we would be looking at is the flexibility of the Government to amend some of its legislation to incorporate the concerns we have about social justice and the environmental measures, and to really address the concerns that the community is expressing about the legislation (Chamarette, 1993a).

Nonetheless, they did not relinquish their ability to challenge the government in the Senate, as the following statement indicates:

We have never ruled out blocking government measures or voting against any particular part of legislation. To rule that out would abrogate our parliamentary responsibilities (Buckley, 1993).

Overall, it would therefore seem that the Greens were more likely to challenge government legislation than the Democrats. The statistical analysis undertaken in chapter four bares out this assertion. It shows that the Greens more frequently voted against the executive (Greens: 40 per

cent; Democrats: 25 per cent) and while the Democrats initiated more motions than the Greens (Greens: 4; Democrats: 8) and were more likely to be successful in their efforts (Greens success rate 0 per cent; Democrats success rate: 75 per cent) the Greens opposed three (23 per cent)

government motions when the Democrats opposed none and the Greens supported Coalition motions twice as often as the Democrats (10:5).

There were two policy areas in which the Greens gave support to the Coalition: the wholesale sales tax increases and the increases to the custom and excise tariff on particular types of fuel. The efforts of the Greens to make changes to the Customs Tariff and Excise Tariff bills had limited policy ramifications. Of more interest was the way the Greens approached

questions of process relating to the Excise Tariff Bill, a theme which will be

discussed in detail in chapter six.

The Greens approach to the Sales Tax Bills illustrates their perception of the way that the balance of power should be used in the Senate. From the outset, the Greens objection to the wholesale sales tax increases focused on

76

The Sales Tax Bills

the inequitable nature of these measures and the detrimental effect the

wine tax increases would have on that industry. In this sense, the similarity between the Democrats and the Greens is clearly evident. The difference in strategies adopted by the minor parties, however, is particularly marked. This divergence began to be evident in the negotiations between the minor parties and the government prior to Senate debates. In the space of a couple of weeks the Democrats had taken responsibility for the Budget Mark II, while the Greens had had their alternative Budget rejected and had responded by threatening to amend the sales tax bill to omit the second round of tax increases.

When Senate debate began on the sales tax increases, the first round was not targeted by the Greens for a couple of reasons. First, because they acknowledged that some form of additional revenue raising increases were

necessary for the 'Government to keep to any reasonable deficit reduction strategy' (Senate, 1993a, p. 1898) and second, because the Democrats had already won compensation measures directly linked to these tax increases.

The second round of sales tax increases, however, was another matter. No compensation had been specifically granted to low income earners for this increase and the Greens argued that because they were not to take effect until the following year, there was time for the government to work out alternative revenue raising measures to replace them. When it came to a vote on 7 October, the Greens, the Coalition and Harradine voted to amend the legislation and omit the second round of the wholesale sales tax increases (Senate, 1993b, p. 1900, 1905 & 1908). Debate on the wine tax took place at the same time and as explained earlier in the chapter, the Democrats, Greens and the Coalition all voted to omit the wine tax.

The government reacted by arguing that it would reject these amendments in the House of Representatives to which the Greens responded by increasing what was at stake. They asserted that the government had three basic options: first, it could accept that the bill had been rejected and work out more equitable ways of revenue raising to replace the second round of wholesales tax measures; second, the government could provide a compensation package to offset the second round of tax increases for low income earners; or third, the government could attempt to force the measures through the Senate to which the Greens would respond by not

77

The Senate, the Minor Parties and the 1993 Budget

passing the legislation (Kingston, 1993b). This was a critical progression in

the Greens' threats to the Budget. It was no longer simply a case of amending the legislation, but of blocking the sales tax bills in their entirety. This meant that all of the sales tax legislation covered in the bills were under threat, not just the second round of sales tax increases. In the coming financial year (1994-5) this would cost the government

approximately $500 million and in the following year around $1 300 million

(Australian Financial Review, 1993a). What's more, because bills only required the Coalition and the Greens to vote against them to be defeated, this guaranteed success to the Greens as the Coalition was unwavering in

its opposition to all tax increases. The Greens confirmed their position on 15 October when they sent a letter to Keating stating that the party would oppose both rounds of the wholesale sales tax measures because of the government's failure to provide adequate compensation to low income

earners.

As conflict became entrenched over the second round of sales tax increases, the government's success in negotiating a deal with the major wine makers did not alter the Greens' resolve to oppose to the wine tax increases. They pointed to the continuing dissent from smaller grape growers in South Australia and Western Australia (McKenzie, 1993b; Peake, 1993b; Wringe,

1993; Reid, 1993) and argued that industry groups had been forced into accepting the government's deal (Davies, 1993a). Even when the Western Australian branch of the Wine Industry Association indicated that it would support the government's compromise deal, on 17 October, the day before

the legislation was to be debated in the Senate, the Greens maintained their opposition. Instead they continued to express the position of grape growers in the Margaret River region (Western Australia), who had only accepted the first stage of the wine tax increases (from 20 per cent to 22 per

cent) and demanded an inquiry into the industry prior to any further increases being initiated (Colebatch, 1993). With the Greens having had won high levels of support from this region in the 1993 election, there was some expectation they would continue to support the rebel grape growers

(Garran, 1993b; Connors, 1993).

Keating reacted to the possibility that key revenue raising measures were under threat by organising a meeting with the Greens for 19 October, the

78

The Sales Tax Bills

day the Senate reconsidered the wholesale sales tax bills that had been

returned, unamended, from the House of Representatives. 6 The context in

which these negotiations took place was quite different to the one in early

September when Dawkins had rejected the Greens' alternative Budget. The

urgency felt by the government to find a way out of the impasse had

intensified; it knew exactly what aspects of its Budget were under siege and

it was clear that the Greens had the intention and the numbers to follow

through with their threats. With these concerns in mind Keating won the

Green's support by offering a $144 million compensation package for low

income earners (Peake, 1993c). These measures are outlined below:

Table 5.4: Budget Compromise 2

• An increase in the Additional Family • Limit the excise on kerosene, fuel oil Payment by $1 per week. and heating oil to the 3 cents a litre

that had applied since the Budget was brought down.

• An increase in the Job Search • Increase the Tasmanian Freight

Allowance for single adults by $3 per Equalisation Scheme and provide a week. subsidy for the Bass Strait passenger

service

• Increased HECS charges for • Expansion of the Emergence Relief

students not completing their degree Program. in the allocated time to be abandoned.

(Keating, 1993b; James, 1993)

As a consequence of this meeting, the Greens agreed to both the second

tranche of sales tax measures and the wine tax increases. With regard to

the wine tax, the Greens ultimately accepted the deal brokered earlier

between the government and industry groups. The only concession the

Greens won was to attach the condition to that the wine industry inquiry's

scope be broadened, its membership extended and that it would be headed

by former Industries Minister, John Button, rather than the market

orientated Industry Commission (McKenzie, 1993c; Peake, 1993c). These

concessions were limited, a point the Greens acknowledged by apologising

to the smaller wine producers whose interests they had been advocating

79

The Senate, the Minor Parties and the

1993 Budget

and felt they had let down (McKenzie, 1993d). It was, however, the only

reasonable option left to the Greens. Threatening to block the sales tax bills

would have only put at risk the compensation package offered by the

government and opened the Greens up to claims of obstructionism. Efforts.

to amend the legislation was doomed to fail as they would require the

support of either the Democrats or Harradine, neither of whom was likely

to comply. .

The compromise package represented a significant victory for the Greens,

achieving their policy objective of reducing the negative impact of the

Budget on low income earners. In doing so, the Greens undoubtedly pushed

the boundaries of responsible government much further than the

Democrats. The threat to block the Sales Tax Bill was a substantial one,

potentially jeopardising the Budget's policy direction by placing at risk the

government's revenue raising capabilities and undermining its deficit

reduction strategy. The purpose behind the threat, however, was to achieve

much more limited changes. Specifically, to lessen the impact of the Budget

on low income earners and protect the interests of the small wine makers.

The Greens were always explicit about this and the minor concessions that

they accepted reflected this fact. Reiterating the limited nature of the

Greens demands was their public acceptance of the government's

concessions:

... [we are] pleased with the outcome of our negotiations with the Prime Minister which has seen significant changes being made to ameliorate the regressive effects of the wholesale sales tax increases.

On the basis of these new measures we will support both tranches on [sic] the wholesale sales tax (Chamarette and Margetts, 1993c).

They were also quick claim that delays to the Budget could have been

avoided had the government put this package forward in the first place

(Chamarette and Margetts, 1993c).

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The Sales Tax Bills

Table 5.5: GWA (WA) Inc Response to Executive Power within the Legislative

Process

Bill Motion Type Purpose Classification Outcome

Against Excise Tariff Procedural To press amendments Policy Failed

Government Customs Tariff Procedural To press amendments Policy Success

motions Customs Tariff Procedural To press amendments Policy Failed

Sales Tax Amendment Omit wine tax Policy Success

(Customs)

For Coalition Sales Tax (Excise) Amendment Omit wine tax Policy Success

motions

Sales Tax Amendment Omit wine tax Policy Success

(General) Sales Tax Amendment Remove second round Policy Success

(Customs) of the wholesale sales

tax increases

Sales Tax (Excise) Amendment Remove second round Policy Success

of the wholesale sales tax increases

Sales Tax Amendment Remove second round Policy Success

(General) of the wholesale sales

tax increases

Excise Tariff Amendment Removal of excise Policy Success

increase on automotive diesel oil for rail purposes

Taxation (Deficit Amendment Remove link between Process Success

Reduction) No. 3 income tax cuts and

other budget bills.

Taxation (Deficit Procedural Tabling of legal Process Success

Reduction) Bill opinion regarding the

(Omnibus bill) constitutionality of

the bill.

Taxation (Deficit Procedural Suspension of Process Success

Reduction) Bill standing orders

(Omnibus bill)

Omnibus Bill Procedural Motion Tabling of legal process success

document regarding the bill's constituti onality

For Australian Sales Tax Amendment Condemn wine tax policy success

Democrat (Customs) motions Sales Tax (Excise) Amendment Conde mn wine tax policy success

Sales Tax Amendment Condemn wine tax policy success

(General)

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The Senate, the Minor Parties and the 1993 Budget

Bill Motion Type Purpose Classification Outcome

Sales Tax (In Situ Amendment Condemn wine tax policy success

Pools)

Sales Tax Amendment Condemn wine tax policy success

Assessment Amendment Taxation (Deficit Amendment retain mutuality policy failed

Reduction) No. 1

For GWA Excise Tariff Amendment Make explicit policy failed

motions commitment to

environment

Taxation (Deficit Amendment Increase income tax policy failed

Reduction) No. 3 for those earning over

$100 000

Conclusion

The policy changes the Democrats made to the Budget were limited: the Budget deficit reduction strategy stayed in place and the personal income

tax cuts to which the government was committed remained unaltered. No

policy measures were fundamentally changed, but instead, government

policies were modified to take into account Democrat concerns. Thus there

was an increase in the rebate for low income earners; a reduction in the

price difference between leaded and unleaded petrol; eye tests remained a

responsibility of Medicare; the retrospective aspect of the new tax on

accrued leave was dropped; and there was a reduction in the increase in

wine tax. These changes to policy do not extend beyond fine tuning the

Budget. Moderate policy change to the Budget reflected a moderate

approach as the Democrats played balance of power politics in a manner

that was intent on change as well as fostering an image of the party as

responsible power holders. Thus they balanced their challenge to executive

power with notions of responsible government; a strategy that saw the

party emerge as a big winner in the 1993 Budget conflict.?

The Greens had the same broad policy concerns as the Democrats but their

approach differed significantly. They held out for greater policy gains on

equity issues and attempted to champion the cause of the small wine

makers. The most striking difference between the minor parties emerged

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The Sales Tax Bills

when the Greens threatened all of the government's sales tax increases

unless the government provided compensation to low increase earners for

the second round of wholesale sales tax increases. Means and ends were a

significant distance apart here, for while the Greens were willing to present

an extreme threat to executive power to achieve change; the policy

measures they were advocating represented a far more limited challenge to

the government.

Endnotes

1. In addition, two further bills, the Sales Tax (In Situ Pools) (Deficit Reduction) Bill 1993 and the Sales Tax (Assessment Amendment) (Deficit Reduction) Bill 1993 were passed without controversy. The former to allow for increased taxes on swimming pools and the later to split the sales tax on luxury cars (See Appendix 2 for details of the passage of these bills through the Senate).

2. Dawkins, at this stage, was in Perth following the birth of his child (Garran, 1993b).

3. This is in contrast to the position of Harradine and the Greens whose vote did not always count. See chapter 3 p. 37.

4. In fact, the threat of an excise was a poorly considered approach. While it had the potential to get the issue off the political agenda in the short term it was only ever likely to consolidate the minor parties resolve against compromising on the issue and there was little to indicate that they would be any more receptive to the government's claims in twelve months time. As the main benefits from the tax were to be procured in its second and third year, the appropriation of revenue through an excise was going to achieve little for the government.

5. Making life even more difficult for the Democrats in the lead up to the election was a series of leadership crises and scandals.

6. The meeting was originally organised for October 18 but was put off for a day (Garran, 1993b; Peake, 1993c).

7. Two examples of just how successful the Democrats were include the media's reception to the way the Democrats behaved where there were references to

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The Senate, the Minor Parties and the 1993 Budget

the 'Kernot Budget' (Sydney Morning Herald, 1993) and public opinion polls

that suggest the Democrats' actions retained high levels of popular legitimacy (see appendix 3).

84

Chapter 6: Other Forms of Challenging Executive

Power: Legislative Review and Symbolic Challenges

Introduction

The previous chapter analysed the divergent strategies of the minor parties over policy issues. This chapter considers two areas in which the minor parties' strategies converged. The first relates to questions of the review process within the Senate. The second involves those instances where the

minor parties initiated amendments which they knew had no chance of success. Both types of challenges to executive power sit more comfortably with notions of responsible government than those discussed in the previous chapter.

Legislative Review

While policy initiation required the Democrats to act cautiously, there were fewer constraints on the party's behaviour when it came to issues of process. Support for the Budget Mark II, for instance, had no implications in this area. Moreover, notions of responsible government, or responsible

85

The Sensate, the Minor Parties and the 1993 Budget

Senate behaviour, tend not to be associated with restricting the actions of

non-governing parties when they review legislation. This is due to a widely held expectation that the rules governing the passage of legislation through the Senate (whether these rules are constitutionally enshrined or located in the standing orders) should be applied equally. Any special treatment enjoyed by the government ought to be set out in these rules, not in their

application. Also of some importance in increasing the likelihood that the Democrats would play an active role in the review of Budget legislation was the party's long standing electoral strategy of making a name for itself by

'keeping the bastards honest' and playing an active role in the review of legislation. The Greens took a similar approach to the issue of process in the Senate debates over the Budget as both parties actively sought to participate in the parliamentary review of the executive. This resulted in two main forms of action. First, both the Greens and the Democrats played a role in initiating procedural motions or supporting Coalition motions that had procedural implications; and second, the Democrats' pursued review through their participation in the committee system.

The central procedural issue that arose during the Budget debates was the right of the Senate to consider individual tax measures on their merit.

Initially, this issue was considered in the context of the government's Omnibus Bill, then later with regard to the Taxation (Deficit Reduction) Bills No.s 1, 2 and 3. The Omnibus Bill was introduced into the Senate and contained the bulk of the government's tax increases. The concern that the minor parties and the Coalition expressed over the form of the Omnibus Bill related to whether it contravened s. 55 of the Constitution which states that:

Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect.

Laws imposing taxation... shall deal with one subject of taxation only (Commonwealth of Australia, 1993, p. 360).

There was no doubt that the Omnibus Bill affected more than one area of taxation and dealt with other subjects. The key contention was whether increasing existing levels of taxation (which was what the Bill legislated

86

Other Forms of Challenging Executive Power: Legislative Review and Sy,nbolic Challenges

for) had the same implications as the imposition of a tax. According to the

government there was a difference and thus the Bill's constitutionality remained intact (Senate, 1993a, p. 641). The Coalition argued otherwise and the Bill was sent to the Senate Committee on Legal and Constitutional Affairs to consider the issue.

The majority of the committee was made up by ALP Senators, including its chair, Senator Barney Cooney. The remainder of the committee comprised two Coalition Senators and Democrat Senator Sid Spindler. The ALP majority, not surprisingly, supported Labor's right to introduce the Bill in

its current form. Nonetheless, it concluded that:

there is a real risk which is significant that the High Court would find the Bill, if enacted, to be a law imposing taxation within the meaning of section 55 of the Constitution (Parliament, 1993a, p. 3).

In essence, the ALP Senators came about as close as they could get to questioning the validity of the government's Bill without expressing outright opposition. The dissenting reports from the Coalition and Democrat members of the Committee went one step further. They argued that the question of the Bill's constitutionality demanded it should be rewritten into separate bills, each dealing with one measure of taxation

(Parliament, 1993a, pp. 8, 19).

The attraction of the Omnibus Bill for the government was strategic in character. By putting most of the government's tax increases in one bill, a strategy based on blocking the Omnibus Bill became near to impossible because it would involve rejecting a wide array of the government's revenue raising sources. If the non-governing parties did this the government was then in a position to claim that its Budget and that executive control of the legislative process was under threat. For minor parties who are especially vulnerable to such assertions, blocking any tax increase would become an extremely high risk strategy. At other times the government's approach would have been immaterial as it is possible to omit specific measures by

amendment (or a requested amendments). In 1993, however, the particular distribution of party representation in the Senate meant that the combined vote of the Coalition and the Greens was sufficient to block, but not to amend legislation. The form of the Omnibus Bill therefore undermined the

87

The Senate, the Minor Parties and the

1993 Budget

capacity of this combination of parties to amend this piece of legislation. For

the Senate to maximise its potential and to operate in a fashion that was independent from the executive, it was therefore necessary for individual tax measures to be introduced independently.

While, Dawkins' justified the form of the Omnibus Bill by arguing that it contained a package of interrelated measures, there was clearly a case to be made that the Bill was designed to inhibit the Senate's proper consideration of those Budget measures it contained. The result of the committee's findings, along with advice from the Attorney-General's Department, pressured Dawkins' back down and his division of the Omnibus Bill into eight separate bills. While this diffused the debate over the Omnibus Bill, it raised two further issues regarding Senate processes.

First, two of the new bills, the Taxation (Deficit Reduction) Bills No. 1 and No. 2 each included more than one measure and replicated the problems associated with the Omnibus Bill. The specific intention of Taxation (Deficit Reduction) Bill 1993 No. 2 was to act as a test case bill with the government placing two, relatively insignificant, tax measures in the same bill (increases in the rates of the fringe benefits tax and increases in the levels of tax on life insurance businesses) to see whether or not the High Court would interpret these increases as impositions of tax and hence declare the legislation constitutionally invalid. With the bill's constitutionality an issue of concern it was also sent to the Senate Standing Committee on Legal and Constitutional Affairs. The view put by the majority of this Committee, and supported by Spindler, was that the government should be able to test whether it was entitled to construct legislation in this manner (Senate, 1993a, p. 1743; Parliament, 1993b, pp. 329 & 335).

The Taxation (Deficit Reduction) Bill No. 1 was a different issue as it included a number of tax increases that had more substantive policy and revenue raising implications. When this Bill was considered by the Senate Standing Committee on Legal and Constitutional Affairs, Spindler, along with the Coalition, repeated the arguments made regarding the Omnibus Bill and demanded that the subjects in question be separated (Parliament,

1993b, p. 332 & 334). While the Democrats initially indicated that they

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Other Forms of Challenging Executive Power: Legislative Review and Symbolic Challenges

were opposed to the form this Bill took (Senate, 1993a, p. 1747), there was a

limit to how far they were willing to push the issue. By the time the Senate came to voting on the Bill on 19 October, pressure to finalise the Budget had become intense and the Democrats' demand that the Bill be split was withdrawn. Instead, they opposed a Coalition motion to split the Bill in four, arguing that the Democrats were not willing to hold up Budget proceedings any longer (Senate, 1993b, p. 2150, 2179-80, 2148-9). Without the support of the minor parties the Coalition failed with its amendments.

A further problem arising from Dawkins' redrafting of the Omnibus Bill was his decision to establish a link between the delivery of personal tax cuts and the passage of the Budget's revenue raising measures. This link was established in the Taxation (Deficit Reduction) Bill No. 3 (Dawkins,

1993d) and was viewed by the minor parties as undermining the Senate's ability to properly review each bill on its own merits. Both the Democrats and the Greens responded to this concern by supporting a successful Coalition motion to remove the link (Senate, 1993a, p. 1776, 1782). The government retorted that it planned to reject these amendments. The conflict was defused, however, once the minor parties and the government agreed on the substance of the Budget, making the linkage between the bills of no consequence.

The above discussion highlights a number of features associated with the role played by the minor parties in the review of the Budget legislation.

Importantly, it reveals the active involvement of the minor parties in this area. While the major parties have ways of marginalising the claims of the minor parties when it comes to issues of policy, such as the argument that they represent only a small portion of the Australian electorate, these assumptions have little influence when debates involves the review of legislation. As a result, minor parties can challenge the major parties and the executive with greater ease when the central issue is related to review and they have jumped at the possibilities this makes available to them.

This indicates that those functions associated with review, namely, the effective scrutiny of legislation and keeping the executive accountable have been enhanced by the presence of the two minor parties. At times it is assumed that Senators from the minor parties have somehow transcended the rough and tumble of parliamentary politics and for altruistic reasons

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The Senate, the Minor Parties and the 1993 Budget

are especially concerned about making parliament work. A more plausible

explanation lies in the structural position that the minor parties occupy as balance of power holders. It is widely recognised that a significant part of the Democrats justification for their existence and continued electoral support relies on the notion that they keep the bastards honest by making the review process work. Such a position broadens the potential for both of the minor parties to appeal to those voters who are disgruntled with the major parties, and thus self preservation explains a good deal about why the minor parties place such an emphasis on review.

In the case of the Budget bills, the government was attempting to subvert the capacity of the minor parties to pursue their role in the review process.

This meant that the minor parties' resolve not to accept the Omnibus Bill was doubly important. First because it provided them with an opportunity to visibly pursue their role in the review process. And second, because the issue with which they were dealing affected their capacity to play this role.

Had the Omnibus Bill entered the Senate in its original form, it would have severely limited the tactics available to the Greens in seeking to make changes to the Budget.

The way the minor parties responded to these issues of review also alludes to the limits the minor parties accept within this sphere of activity. In particular, they did not persist in their efforts to split the Taxation (Deficit Reduction) Bill No. 1 or to remove of the linkage between Budget measures in the Taxation (Deficit Reduction) Bill No. 3. There was little left to be gained by pressing these issues as the Budget negotiations had been finalised. The only likely consequence of the minor parties' persisting with this line of action was that they would be labelled obstructionist. This suggests a high level of pragmatism in the way that the minor parties' approach issues of process and a reasonable balance being found between the need for both governability and legislative review.

Finally, this example draws attention to the role played by the Democrats in the committee system. It is widely acknowledged that the committee system has improved the scrutiny of legislation and chapter two noted that the presence of the Democrats has furthered the committee system's ability to achieve this end. Spindler's role in the Senate Committee for Legal and

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Other Forms of Challenging Executive Power: Legislative Review and Symbolic Challenges

Constitutional Affairs supports this characterisation. Evidence of party

discipline was apparent in the position adopted by the major parties as they approached the question of the Omnibus Bill's constitutionality. This resulted in Labor members of the committee supporting the government's position, while the Coalition demanded it be changed. In the highly charged Senate debates over the Bill's constitutionality, along with the patterns of party behaviour associated with the adversarial relationship between the major parties, it is hard to envisage a different outcome. There were, however, significant problems with the form of the Bill. Spindler, by supporting Coalition claims that the Bill should be redrafted, played an important part in ensuring that Dawkin's reconsider how the government drafted its Budget legislation and thus prompted the effective operation of the review process.

Spindler's influence rested on two aspects of his unique position within the committee. First, his response served as a litmus test for how the minor parties were likely to approach the Bill in the Senate. Consequently, his stance on the Omnibus Bill placed pressure on Dawkins to change the legislation this was clearly identified as something that would generate serious problems for the passage of the Budget through the Senate. Second, there is a degree to which minor parties are viewed to be distanced from the adversarial relationship between the major parties and their tendency to respond to questions of review on the basis of their opposition to each other, not the rigorous scrutiny of legislation.' To the extent that this occurs, the opinion expressed by minor party representatives in the committee system is likely to shape what is conceived of as a fair interpretation of the rules or the effective scrutiny of legislation.

A different incident that directs attention to the significance minor parties attach to issues of process was the Greens' response to the Custom's Tariff Bill. The Custom's Tariff Bill was one of two pieces of legislation that

provided for increases on tobacco and petrol tax. In the debate on the two bills the Greens and Harradine successfully supported a number of amendments, moved by the Coalition, which removed the fuel tax increase on rail and shipping. The Greens' support for the Coalition was based on their efforts to set up a tax regime for fuel that discriminated in favour of environmentally friendly methods of transport. The amended bills returned

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The Senate, the Minor Parties and the 1993 Budget

from the House of Representatives with all of the Coalition's requested

amendments rejected. 2 ALP Senator, Gareth Evans, then moved the motion that the requests not be pressed for the Excise Tariff Bill. When the vote was taken, the government, Harradine and the Democrats voted together.

The Coalition voted against the motion and although it had the support of Chamarette, Margetts was absent from the chamber and therefore did not vote. This meant that the government's motion was passed with a majority of one (Senate, 1993b, p. 2411). Margetts later explain that her absence was based on the concern that her vote would lead to a tie in the Senate and provoke a constitutional crisis because there was no existing way to deal with the situation (Tingle, 1993b).

Table 6.1 The Excise Tariff Bill: A Chronology

Excise Tariff (Deficit Reduction) Bill 1993

Date Action Moved by Description Ayes Noes Result

Sept 2 Foreman (ALP) Passed

Selection of Bills Committee referred this Bill along with the Customs Tariff (Deficit Reduction) Bill 1993 to the Finance and Public Administration Committee for considerations. Debate adjourned pending the Reports findings.

Sept 7 First reading Sherry (ALP)

Oct. 6 Report tabled Report finds that while the Bills should be agreed to but hopes that the Government may accept or introduce needed amendments and that the Opposition reserves its position in regard to amendments' (Parliament, I993c, p. 170). The minority report was highly critical of the Bills (Parliament, I993c, pp. 171-172). Oct 13 Report that Harradine will support the government's sales tax increases if the marine fuel levy is

dropped (Davies, I993b) The Government further attempted to win Harradine's support by offering a boost to the subsidy on freight between the mainland and Tasmania (Garran, I993c). Procedural: Hill (LIB) Negatived

suspension of

standing orders

Oct 18 Bill read a first time Sherry (ALP) Affirmative

Oct 19 Coulter (AD) issues a press release suggesting that the Democrats might vote against the Bill if the Government failed to support a plan for a $50 million program to increase ethanol production (Senate, 1993a, p. 2113). Democrat Senators met with Bob McMullan. Government and Democrats agree to a $20 million bounty scheme which would encourage the production of ethanol. (Millets and Davies, 1993).

Amendment to Watson (LIB) Condemn increase in fuel COAL: 28 ALP: 24 Negatived

condemn taxes IND: I AD: 7 29: 33

GWA: 2

Bill read a second McMullan Affirmative

time (ALP)

Oct 20 Request amendment Harradine (IND) Remove I c increase in Affirmative

excise on certain fuels

Request amendment Margetts Sought to force the AD: 7 ALP: 20 Negatived

(GWA) Government to make GWA: 2 COAL: 30 9: 50

explicit their commitment to meeting environmental and equity criteria (Senate, 1993b, pp. 2005-2006, 2233-2235).

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Other Forms of Challenging Executive Power: Legislative Review and Symbolic Challenges

Excise Tariff (Deficit Reduction) Bill 1993

Date Action Moved by j Description Ayes Noes Result

Request amendment Hill (LIB) Removal of excise Negatived

(amendments 1-9)

Request amendment Hill (LIB) Removal of excise increase Negatived

on automotive diesel oil other than for use in rail or road transport services (amendment 10)

Oct 21 Request amendment Hill (LIB) Removal of excise increase Negatived

on industrial diesel oil other than for use in rail or road transport services

(amendment 11)

Request amendment Hill (LIB) Removal of excise increase COAL: 30 ALP 24 Affirmative

on automotive diesel oil for GWA: 2 AD 7 33: 31

rail services (amendment IND: 12)

Request amendment Hill (LIB) Removal of excise increase COAL: 30 :. ALP: 24 Negatived on automotive diesel oil for IND: I AD: 7 31:33

use in road transport GWA: 2

(amendment 13)

Request amendment Hill (LIB) Removal of excise increase Agreed to

on industrial diesel fuel for use in rail services

(amendment 14)

Request amendment Hill (LIB) Removal of excise increase Negatived

on industrial diesel fuel for use in road transport

(amendment 15)

Request amendment O'Chee (NPA) Removal of excise increase Negatived

on industrial diesel fuel for use in electricity generation where there is no reasonable access to electricity

(amendment 15a)

Request amendment Hill (LIB) Removal of excise increase Agreed to

on marine diesel fuel and fuel oil for marine purposes (amendment 16 and 17)

Request amendment Hill (LIB) Removal of excise increase Negatived

on other fuel categories (amendment 18)

Request amendment Hill (LIB) Removal of excise increase Negatived

gasoline blends (amendment 19)

Request amendment Watson (LIB) Removal of excise on the Agreed

diesel component for coastal shipping.

Request amendment Margetts Exempt the indexation of Negatived

(GWA) the excise as well as its

increase. House of Representatives rejects all requested amendments except the one by Harradine.

Procedural Evans (ALP) Not to press amendments ALP: 26 COAL: 32 Affirmative

rejected AD: 7 GWA: I 34: 33

IND:

Margetts absent from chamber

Third reading Evans (ALP) ALP: 26 COAL: 32 Affirmative

AD: 7 IND: 1 35: 33

GWA: 2

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The Senate, the Minor Parties and the

1993 Budget

Evans then moved that the requests to the Customs Tariff Bill not be

pressed. This time Margetts was present and when the vote was taken both Greens supported the Coalition. This left an equal number of votes (Senate, 1993b, p. 2424) and the motion should have been negatived as s. 23 of the Constitution states that 'questions arising in the Senate shall be determined by a majority of votes and when the votes are equally divided the question shall be resolved in the negative' (Parliamentary Patter, 1993, p. 8).

The situation, however, was more complicated. The whole point of s. 23 was to ensure that any changes the Senate made to legislation had support from a majority in that chamber. It was for this reason that a tied vote, that is, a failure to win a majority, led to requested changes being negatived. In this

instance the scenario the Senate faced was unprecedented because the motion had been for not pressing changes to the legislation and an equal vote therefore meant that changes to the legislation would be pressed.

According to the intention of the Constitution, such changes ought to have required a Senate majority. It was the complex issues raised by this situation that Margetts earlier absence from the Senate had been designed to avoid.

The government, through Senator Evans, attempted to reverse its original motion. It moved that the request be pressed, aware that an equal vote would lead to the motion being negatived and the requested amendments being dropped. The Coalition took objection to this with Hill raising a point of order and arguing that Evans had no right to move another motion because the matter had already been resolved (Senate, 1993b, pp. 2432-

2433).

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Other Forms of Challenging Executive Power: Legislative Review and Symbolic Challenges

Table 6.2: The Customs Tariff Bill: A Chronology

Customs Tariff ( Deficit Reduction) Bill

Date Action Moved by Description Ayes Noes Result

Sept 2 Foreman (ALP) Passed

Selection of Bills Committee referred this Bill along with the Excise Tariff (Deficit Reduction) Bill 1993 to the Finance and Public Administration Committee for considerations. Debate adjourned pending the Reports

findings.

Oct. 6 Report tabled Report finds that while the Bills should be agreed to 'but hopes that the

Government may accept or introduce needed amendments and that the Opposition reserves its position in regard to amendments.' (Parliament, 1993c, p. 170). The minority report was highly critical of the Bills (Parliament, I993c, pp.

171-2).

Oct 13 Report that Harradine will support the government's sales tax increases if the

marine fuel levy is dropped (Davies, 1993b). The Government further attempted to win Harradine's support by offering a boost to the subsidy on freight between the mainland and Tasmania (Garran, I993c).

Procedural: suspension Hill (LIB) Negatived

of standing orders

Oct 18 Bill read a first time Sherry (ALP)

Bill read a second time McMullan (ALP)

Oct 19 Amendment to Macdonald Condemns the increase in COAL: 30 ALP: 24 Negatived

condemn (LIB) the fuel tax (Senate, 1993b, IND: I AD: 7

p. 630). GWA: 2

Bill read a second time McMullan Affirmative

(ALP)

Oct 21 Request amendments Hill (LIB) Those amendments not Negatived

agreed to in the Excise Tariff Bill (Amendments —11, 13, 15, 18 and 19).

Request amendment Hill (LIB) Those amendments agreed Agreed

to in the Excise Tariff Bill (Amendments 12, 14, 16, 17 and 20).

Request amendment Margetts Attaching three conditions Negatived

(GWA) to the Bill in an effort to

ensure that it is an

environmental measure rather than an income collecting measure House of Representatives returns the Senate's Bill rejecting requested amendments.

That the requests not be Evans (ALP) Government attempting to pressed. have amendments

abandoned.

Procedural motion Crichton- That he leave the chair and COAL: 32 ALP: 26 Negatived

Browne report to the Senate IND: I AD: 7 33:35

(LIB)(Senate GWA: 2

Chair)

Procedural motion Reid (LIB) That progress be reported COAL: 32 ALP: 26 Negatived

AD: 7 32: 36

GWA: 2 IND:

Procedural: question Evans (ALP) ALP: 26 COAL: 32 Negatived

put that the requests not AD: 7 GWA: 2 34:34

be pressed. IND:

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The Senate, the Minor Parties and the

1993 Budget

Customs Tariff (Deficit Reduction) Bill

Date Action Moved by ! Description Ayes Noes Result

Evans 'indicated that it would be desirable to test the view of the committee by moving the contrary motion - That the requests be pressed' (Senate, 1993a, p. 690). Point of order raised by Hill (LIB) that 'the committee having determined the

question that the requests be not pressed, no further motion could be moved in the consideration of the message' (Senate, 1993a, p. 690). Chair: Crichton-Browne, ruled that under standing order 141 it was in order to move the motion (Senate, 1993a, p. 690). _

Procedural: immediate Evans (ALP) ALP: 25

_

COAL: 31 Affirmative

determination of dissent AD: 7 35:31

from the chair. GWA: 2

IND:

Procedural: the Senate Hill (LIB) COAL: 31 ALP: 25 Negatived

dissent from President's AD: 7 31:35

ruling GWA: 2

IND:

Procedural: that the Evans (ALP) COAL: 32 ALP: 26 Negatived

requests be pressed GWA: 2 AD: 7 34: 34

IND:

Procedural: that the Hill (LIB) COAL: 31 ALP: 25 Negatived

Senate dissent from the AD: 7 31:35

President's ruling. GWA: 2

IND: I

Third Reading Evans (ALP) ALP: 26 COAL: 32 Affirmative

AD: 7 IND:

GWA: 2

The procedural debate that followed focused on whether Evans was able to

move a motion twice. The government continued to emphasise the need for the Senate's will to be clearly established prior to a requested amendment being passed, while the Coalition claimed that the original motion put by Evans had a consequence and that consequence was for the request to be pressed. In making its claim, the ALP had the support of Clerk of the

Senate, Harry Evans, who had unequivocally found that the government was well within its rights to reword a motion such as the one moved by

Gareth Evans.

Within the context of this monograph the nuances of the above debate are less important than the way the Greens responded to the situation.

Throughout the debate over the procedural motion the Greens consistently supported Evans' right to move the reworded motion. This meant that along with Harradine and the Democrats, the Greens vote secured the ALP's position. Yet when debate moved back from the procedural question to the policy issue, the Greens resumed their support for the Coalition's position.

The end result was a tied vote and the motion to press the requests was resolved in the negative. In essence, by supporting the ALP's procedural

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Other Forms of Challenging Executive Power: Legislative Review and Symbolic Challenges

motion the Greens were voting against their interests in terms of policy

outcomes. Had they consistently voted with the Coalition then Evans would not have been able to pass his reworded motion and the motion to press the requested amendment would have succeeded.

This episode demonstrates that the Greens considered it more important to seek a fair outcome on a procedural question than to force their position on a policy issue. It was clearly important for the Greens to construct their position in this debate as one that was highly aware of procedural concerns

and as a party did not want to disrupt the Senate's operation. This formed the basis upon which Margett's justified her absence from the Senate over the Excise Tariff Bill. She was also to argue that her return to the chamber was because the Greens considered that the procedural problem had been

sufficiently addressed to ensure a satisfactory resolution to the situation (Tingle, 1993b). In this instance the Greens jeopardised their policy objectives to ensure that the Senate operated in a manner they believed was procedurally correct. Having said this, it is important not to overstate what this example reveals about how far the Greens would go in the balance between issues of process and policy. The policy outcome that the Greens were willing to surrender to the review process had been of secondary importance to the Greens in the Budget debates. The fact that this was the last part of the Budget to be finalised must also be taken into account as it undoubtedly increased the pressure on the Greens to let the government's Budget pass.

Minor Party Initiated Motions: A Symbolic Challenge to

Executive Power

The minor parties also initiated amendments to the government's Budget that were doomed to fail because they had no chance of winning support from either of the major parties. These actions draw attention to the limited power of the minor parties and the extent to which they are reliant on the major parties to wield the balance of power and influence legislative outcomes. Nonetheless, these challenges to executive power do have symbolic importance and ensure that alternative ways of approaching policy enters into parliamentary debate. At the very least, this increases

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The Senate, the Minor Parties and the 1993 Budget

the likelihood that parliament meets one of its key objectives: to operate as

the location of political debate.

Throughout Senate debates there were a number of instances in which

minor parties moved amendments to government bills that, if successful,

would have substantially altered the nature of the Budget legislation and

the government's policy agenda. One of these was the Democrats' efforts to

retain the principle of mutuality for credit unions and building societies in

the Taxation (Deficit Reduction) Bill No. 1, a challenge that would have

reduced the government's push towards increasing competition within the

financial sector. A second example was the Greens' efforts to have

environmental obligations explicitly expressed in the Customs and Excise

Tariff Bills. This would have changed the bills emphasis from being a

revenue raising to an environmental measure. A third example was the

Greens' attempt to amend the Taxation (Deficit Reduction) Bill No. 3 to

raise levels of income tax for those earning more than $100 000 p.a. by five

per cent (from 47 per cent to 52 per cent). 3 To have forced such a change on

the government would have represented a significant challenge to the

government's right to determine the broad parameters of policy. As then

ALP Senator Bob McMullan explained:

These amendments take a significant step further in the proposition that in some way or other it is the Senate that should decide what the tax regime of the country is. Instead of merely seeking to oppose some government proposals, we now have a proposal for the Senate to actually write in new tax scales. That is another step further...

...I accept the right of the Greens and the Democrats to make debating points about their disagreement with the overall government tax strategy and to use this as a vehicle to do that and to say, 'We don't agree with the approach to income tax that the government is putting forward', but as a way of going about setting tax policy and tax rates it is not sustainable (Senate, 1993a, p. 1785).

In each of these examples the minor parties were pursuing their own policy

agenda in a manner that represented a significant challenge to the

executive's policy goals. The reality of the. situation, however, was that the

policy gap between the Coalition and the minor parties was significant

enough to ensure these policy initiatives of the minor parties would not win

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Other Forms of Challenging Executive Power: Legislative Review and Symbolic Challenges

Coalition support. Thus, while the Greens and the Democrats traded

support for each other's policy initiatives, they never had any chance of

success. This does not mean that the minor parties are completely

powerless in these instances. Bringing different ideas into the public arena

for debate offers its own challenges to the executive. Such challenges,

however, are of a substantially different kind than those that come into

play when the minor parties wield the balance of power and can defeat or

amend government legislation.

Conclusion

The purpose of this chapter was to illustrate the sorts of issues at stake when minor parties force the review of legislation or make a symbolic

challenge to executive power. Because of the context of these challenges, the

restraints on minor party actions are different to those that come in to

operation when the government's policy agenda may be undermined by the

actions of the minor parties. Notions of responsible government are clearly

less significant in these situations. When it comes to the review of

legislation, governmental prerogative tends to be overridden by a belief in

the fair application of Senate rules and retaining effective scrutiny of

legislation and accountability mechanisms. As symbolic challenges do not

force the government to change their policy in any way, they allow the

minor parties to take a stand on a far wider variety of issues and present a

more radical policy agenda without moving into the terrain of responsible

government. The final chapter of the monograph seeks to draw these

divergent themes together and provide an overview of how minor party

actions in the Senate may be characterised.

Endnotes

1. Although in this instance it should be noted that the ALP Senators got pretty close to opposing the form of their own legislation.

2. The amendments were requested as is the convention for Budget bills to ensure they are not constitutionally valid under s. 53.

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The Senate, the Minor Parties and the 1993 Budget

3. There was a fourth amendment moved by the Greens which opposed the

indexation of the excise as well as its increase. This measure was quickly dismissed by the Opposition which argued that it could not support the amendment because it had not been stated as policy. The request was

subsequently negatived (Senate, 1993b, p. 2307).

100

Chapter 7: Conclusion

The first chapter of the monograph argued that the Australian Senate has become an increasingly powerful institution and that the minor parties have played a central role in this process. It also highlighted the various forms of activism available to non-governing majorities in the Senate,

namely, review, policy initiation and obstructionism. Chapter two developed the argument that while the adversarial relationship between the major parties meant that the opposition, in the Senate, will tend to focus on disrupting and obstructing the government, minor parties are more likely to pursue a wider array of strategies based on the party's political agenda. From 1972 this saw the DLP, intent on making life as difficult as possible for a Labor government, join with the Coalition to undermine the Whitlam government's control of the policy agenda and the Budget. By way of contrast, the rationale for the Democrats' existence has strong links to

the party's role in the review process which has tended to be reflected in the way this minor party acts.

The conclusion to this monograph seeks to characterise the behaviour of the minor parties in the 1993 Budget debates. Drawing from the preceding discussion it is possible to identify five components in characterising this

behaviour. These are:

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The Senate, the Minor Parties and the 1993 Budget

1. their capacity to influence legislative outcomes

2. the type of activism

3. the intensity of the challenge to the government's policy agenda

4. the persistence with which these objectives are pursued, and

5. the frequency with which this capacity is used.

Each of these themes will be considered in the context of the 1993 Budget conflict.

The Capacity of the Minor Parties in the 1993 Budget

Conflict

The role of the minor parties in the Senate is affected by their capacity to influence the executive's legislative agenda. In particular, their capacity is influenced by whether or not the minor parties hold the balance of power and if they are given the opportunity to use this power. As Cheryl Kernot recently explained:

It is important to recognise that the balance of power exists only where the major opposition party votes against the government, which contrary to popular belief, is not the majority of the time (Kernot, 1997, p. 32).

Thus a distinction needs to be made between those instances where the

minor parties hold the balance of power and those where they do not. When minor parties hold the balance of power they do so on their own or share it with another minor party or independent. As chapter three explained, life is made even more complicated by the fact that a majority is required to pass a bill or an amendment through the Senate, while an equal number of votes is need to block legislation. This creates three different balance of power scenarios:

• a minor party may hold the balance of power when it comes to amendments

• a minor party may hold the balance of power when it comes to blocking legislation

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Conclusion

a minor party may hold the balance of power for both amendments and

the blocking of bills.

When minor parties do not hold the balance of power their influence on the legislative process may take two forms. First, minor parties can move motions that provide a symbolic challenge within the existing policy debate.

While the immediate impact of such actions is limited, it may be important in terms of expressing a broad array of interests and policy issues within the parliamentary forum. Second, minor parties may use their ability to affect the outcome of one decision, to bargain for changes in another. All of

these scenarios are set out in a systematic fashion in figure 7.1.

The broad array of scenarios in which minor parties have the capacity to influence legislative outcomes was evident in 1993. It was quickly established that the minor parties were to hold the balance of power when it came to all of Labor's tax increases. This was because of Hewson's unambiguous claim that the Coalition would oppose all of these measures.

For the Greens and the Democrats, it was not tax increases, per se, that they were against, but their perceived inequity. Their objective subsequently then became finding ways of translating the balance of power into a meaningful outcome in policy terms.

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The Senate, the Minor Parties and the

1993 Budget

Figure 7.1: Factors Influencing the Strategies Available to Minor Parties in the Senate

Influence outcome for both amendments or blocking legislation.

Balance of power in own right.

Instance in which minor parties hold the balance Influence outcome for

of power. amendments only.

Share the balance of power I

with another minor party

and/or independent.

Influence outcome for blocking only.

Bargaining power derived ....... from issues in which minor parties hold the balance of power.

Instances in which minor parties do not hold the balance of power.

Symbolic challenge only

When tax increases were not involved, the minor parties did not hold the

balance of power. Their capacity to influence legislative, outcomes was therefore more limited and in these instances the minor parties used alternative methods to influence the government. On a number of occasions they were involved in what could best be described as a symbolic challenge to the executive. Examples of this include the Democrat amendment to retain the principle of mutuality in the Taxation (Deficit Reduction) Bill No.

1 and the Greens proposal to increase income tax for those earning over $100 000 in the Taxation (Deficit Reduction) Bill No. 3. A symbolic challenge occurs when amendments are initiated by the minor parties with no chance of success. This is an important aspect of the role of the minor parties in the Senate because the very act of questioning the government's policy agenda and bringing in alternative policy discourses into parliamentary debates makes a contribution to parliament's role as the

location in which political debate takes place.

The minor parties also used the fact that they held the balance of power in certain instances to gain leverage over others. This indicates a delineation between those instances where the minor parties hold the balance of power,

104

Conclusion

and those when they do not, less clear than it may initially seem. Two

examples of this stand out in the 1993 Budget. First, there was the Democrats involvement in the Budget Mark II. In this instance, the Democrats used their potential to vote against the government's tax increases to win four changes to the Budget. These changes included an increase in the rebate to low income earners aimed to provide compensation for the sales tax increases, a measure advocated by the Democrats that had no chance of winning Coalition support. Thus the Democrats can be seen as trading their influence over all of the government's proposed tax increases to win specific changes over the Budget.

A second example of this bargaining power was the Greens' negotiations with the government over the Budget that resulted in further compensation being given to low income earners in return for the passage of the sales tax bills. Like the Democrats, the Greens were able to achieve policy outcomes that extended beyond those issues in which they enjoyed the balance of power. Hence, while there are limitations on the minor parties because they

require the support of the opposition to block or amend bills in the Senate, the precise parameters of this influence are blurred due to their ability, on some occasions, to transfer influence from one bill to another.

Both the Greens and the Democrats have imposed restrictions on themselves with regard to how they use this capacity to bargain. As Kernot

explains, the Democrats have 'a self-imposed etiquette [including].., refusing to trade-off a good outcome in one area for a bad outcome in another completely unrelated area' (Kernot, 1997, p. 33). The Greens have also made comments to this effect (Margetts, 1996). In 1993 it was the equity implications of the Budget that provided the connection between the minor parties negotiating over the bills and the concessions made by the government. Such restrictions mean that minor parties have little scope to use the balance of power in the review of legislation to bargain for changes over policy issues. This seems entirely appropriate. The

fair application of rules or keeping the government accountable are not matters that should be legitimately traded off by a minor party for policy

concessions.

105

The Senate, the Minor Parties and the 1993 Budget

On those occasions where the minor parties do hold the balance of power

their capacity to influence legislation is further shaped by whether they hold the balance of power in their own right or if they share this power with another minor party or independent. In 1993 the particular distribution of party representation in the Senate meant that the capacity of minor parties

differed depending on whether attempts were being made to block or amend legislation. The table below summarises the various scenarios in which the minor parties could combine with the Coalition to defeat the government and gives an example of each that took place in the 1993 Budget debates.

Table 7.1: Combinations Able to Defeat the Executive in the 1993 Budget and Examples

Scenario Example

AD and COAL combine to amend Omit wine tax from the sales tax bills. legislation.

AD and COAL combine to block None.

legislation.

COAL and GWA combine to block None, but the Greens did threaten this legislation. action over the sales tax bills.

COAL and GWA combine to block To press amendments to the Customs government motions. Tariff Bill.

COAL, GWA and Harradine (IND) Omit second round of wholesale sales tax. combine to amend government legislation.

The variety of these combinations illustrates that wielding the balance of

power and the capacity of minor parties and independents to influence legislative outcomes is far more complex than it is often portrayed.

Analysing how the minor parties deal with legislation as it passes through the Senate requires an understanding of their varying capacities in different circumstances. For instance, it is only possible to understand why

the Greens threatened to block the sales tax bills once their ability to influence legislation in this context is taken into account. As has been previously explained, to block legislation, the Greens only required the support of the Coalition, while to amend legislation demanded the

additional support of either Harradine or the Democrats. Thus, in an effort

106

Conclusion

to maximise their potential bargaining power, the Greens chose the threat

of blocking the Budget bills as this did not require the support of either the Democrats or Harradine.

The picture this constructs of the minor party's capacity to influence the budget legislation is multidimensional. In terms of the direct influence of both minor parties, this was restricted to the government's proposed tax

increases and within this context, particular issues relating to the review of legislation. They were, however, able to extend their influence by engaging in a bargaining process that by-passed the Coalition and used the leverage that the balance of power provided over tax increases to achieve other policy outcomes. Although the major parties relied more heavily on the Democrats to have their position supported within the Senate, the fact that the Greens could combine with the Coalition to defeat government legislation meant that they had an excellent basis upon which to establish a bargaining position.

The Type and Intensity of Minor Party Challenges to

Executive Power in the 1993 Budget Conflict

Table 7.2 provides a typology of the sorts of challenges to executive power that might be under taken by the minor parties in the Senate. The point of the typology is to set out these variables in a structured way. It should be emphasised that this is only devised as guide to locate a number of possible ways that the minor parties may challenge executive power in the Senate.

The typology identifies two key criteria for assessing the actions of the minor parties. First, there is the form that the challenge takes. These are drawn from the categories set out in chapter one. To briefly reiterate, parliamentary review subjects government to scrutiny and in the process makes it accountable to both the parliament and the electorate. This has implications for the form legislation takes and the processes that legislation encounters. Policy initiation, by way of contrast, is directed towards the content of legislation and seeks to make government policy more consistent with the objectives of the minor party in question. There are a number of ways this might be achieved. It could be by amending the legislation to add

107

The Senate, the Minor Parties and the 1993 Budget

something new, or might involve forcing the removal of an aspect of

government policy. The distinguishing characteristic associated with obstructionism is its negativity: its aim is to undermine governability and offers nothing in its place.

The second criterion in the typology is the intensity of the challenge to executive power. This highlights the notion that each type of activism may be pursued to varying degrees. In the context of review, the intensity of activism refers to the rigor of the review process; for policy initiation, it is

the extent that the government's policy program is challenged; and obstructionism, the degree to which governability is threatened. What the typology illustrates is the wide range of approaches minor parties have available to them in dealing with the executive when they hold the balance of power. This reinforces one of the central themes in the monograph: that it is not only important to recognise challenges to executive power, but that the particular character of this challenge is conceptually important. The

following discussion seeks to locate the activism of the minor parties within the framework set up by the typology.

108

Conclusion

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109

The Senate, the Minor Parties and the 1993 Budget

One of the notable features of the Democrats' role in the 1993 Budget

debates was their limited role in policy initiation. The wine tax was the only policy area in which the party used the balance of power to force a change to government policy within the formal legislative process. Not only was it an isolated case, in the terms set up within the typology, it was also of a relatively low order: it did not undermine the government's broad goals of policy or jeopardise those revenue raising measures that would allow the government to achieve these goals.

The Democrats involvement in the Budget Mark II, which resulted in the government making four changes to its appropriations suggests the party took a more active role in policy initiation than is revealed by simply looking at the Senate debates. The intensity of the changes the Democrats' achieved through this process remained limited, altering the detail of the budget measures rather than its design or broader policy goals.

Importantly, they left in tact the government's two key policy commitments, a deficit reduction strategy and income tax cuts. Nonetheless, the fact that the outcome of these changes was to make the Budget more equitable has general policy ramifications that go beyond just the fine detail of the budget

detail.

Chapter two argued that the lines between review and policy initiation are not always clearly defined. This is reflected in the Democrats' response to the issue of the wine tax. While the party's rejection of the wine tax increases had policy implications, their justification for opposing these

measures may also be located within the review process. The main stated concern of the Democrats was not the way that the wine tax deviated from their own policy objectives (although this was undoubtedly part of their

agenda), but the claim that the wine tax increases were 'bad law'. By this they meant that the tax increases were poorly conceived in terms of the government's own policy goals. This approach is most accurately described

as the consequence of the rigorous scrutiny of legislation which led to the identification of logical inconsistencies within various aspects of government legislation and government policy. It can therefore be located within the typology as being the result of a high intensity of review.

110

Conclusion

The Greens had a significantly different approach to policy initiation than

the Democrats. Interestingly, the goals of the both the Greens and the Democrats were essentially the same: to make the Budget more equitable.

What differed was the range of issues the Greens were willing to challenge the government on and the intensity of their threat to block the second round of wholesale sales tax measures. Had the Greens gone through with this threat a substantial part of the government's revenue raising capacity would have been undermined, and with it the ability to pursue their policy

goals.

Various explanations have been touted for why the Greens were willing to challenge the executive in the area of policy initiation. The key lies in the notion that as new balance of power holders, they appeared to be less sensitised to notions of responsible government than the Democrats.

Further extending the divergence between the two minor parties was Democrat efforts to use the perception that they were responsible balance of power holders to increase their popularity at the expense of the Greens. The outcome was a greater willingness by the Greens to push the executive on

questions of policy.

Both the Democrats and the Greens played an equally active role in the review of legislation, challenging Labor's Omnibus Bill and taking the government to task when the Senate's capacity to properly scrutinise legislation was threatened. This was reinforced by Senator Spindler's role

in the Senate Committee on Legal and Constitutional Affairs which further strengthened the minor parties' capacity to review legislation. It was also reflected in the way both the Democrats and the Greens voted on process related issues. In particular, their insistence that the Senate should be in a position to assess each tax increase on its own merits.

One final point worth highlighting is that the tactics adopted by both of the minor parties throughout the 1993 Budget conflict could not accurately be described as obstructionist. At all times minor party challenges to the executive had some constructive intent: to improve policy or the review process. As it has been emphasised throughout the monograph, this

approach reflects the need for the minor parties to retain their legitimacy, more than any altruism on their behalf. Unlike the Greens, the Democrats

111

The Senate, the Minor Parties and the 1993 Budget

pursued a strategy that actively sought to dispel claims of obstructionism.

Thus, they avoided any high level challenge to the government's policy agenda as this risked them being given the obstructionist label. The Greens were not so cautious, the result of which was that they endured far greater criticism from politicians and within the press for their activities.

Persistence

A further variable in analysing the activism of the minor parties is the persistence with which they pursue their objectives. In those instances where a minor party challenges an aspect of the government's legislative agenda (whether it is on the basis of review, policy initiation or obstructionism) and this demand is ignored by the government, then that minor party must chose whether it will persist with the demand. Usually this means that legislation has been altered by the Senate and the

government has refused to accept these changes in the House of Representatives. Whether or not a minor party persists with its demands at this stage of the legislative process effects the way this challenge should be characterised. In sum, the greater the persistence, the greater the challenge.

Conflict over the 1993 Budget only reveals only a limited amount about the persistence of the minor parties. This was because, in most cases, the government negotiated with the minor parties prior to the House of Representatives dealing with the legislation a second time. Overall, however, the Greens appeared somewhat more persistent than the Democrats. At every chance to compromise the Democrats were quick to seize the opportunity. This was the pattern of behaviour they adopted in their response to the Budget Mark II and the wine tax issue. Even on questions of review, the Democrats adopted an accommodating approach.

Thus, they did not persist in their efforts to split the Taxation (Deficit Reduction) Bill No. 1 into a number of different bills. When it came to issues of policy, the Greens were less obliging than the Democrats and more

willing to persist in their efforts to win greater compensation for low income earners. Not only was this evident in their threat to block the sales tax

112

Conclusion

bills, it can also be associated with the Greens decision to press

amendments to the Customs and Excise Tariff Bills.

Frequency

While most of the monograph has engaged in a qualitative analysis of the way the minor parties behave in the Senate, quantitative issues are also

relevant. Hence the frequency of the challenge of executive power is of

considerable importance. Because of the scope of this study, the main point

of comparison is with the other parties and their activities in the 1993

Budget debates. Chapter four allowed certain conclusions to be drawn

regarding the activities of the Greens and the Democrats in 1993. First, the

level of opposition to the executive demonstrated by the minor parties was

dwarfed by the Coalition's response. In total the Coalition initiated 91

motions compared to the Greens four and the Democrats eight. Second, it

shows that the Greens were far more likely to support Coalition motions

and oppose government motions than the Democrats, reflecting their freer

approach to Senate activism. Third, the Democrats were more likely to

initiate more motions than the Greens and thus avoided a little more

balance in the activism ledger. In general, the picture chapter four

constructed was one in which minor party activism was more limited in the

1993 Budget debates than is often assumed.

In Summary

The monograph has sought to characterise the nature of minor party activism in the Senate. In broad terms it found that minor party activism

has been constrained by notions of responsible government and that this

has meant there are limits to how far the Greens and the Democrats will go

in challenging executive power. The outcome for the Senate is that it does

act as a check on the executive, but the extent to which it does so depends

on a diverse range of factors which affect the capacity and strategies of the

minor parties as they seek to maximise their political influence. The

particular political objectives of the minor party or parties when they hold

113

The Senate, the Minor Parties and the 1993 Budget

the balance of power has also been identified as being crucial within the

process. The overall effect has been to elevate the importance of the Senate as a parliamentary institution within Australia, decreasing both executive power and the capacity of the major parties to eclipse all policy debates. For those favouring a parliament where executive power is constrained, these developments will be well received. Others, especially those who advocate strong government, will be less enthused about the role the Senate has come to adopt in this age of minor party activism.

Endnotes

1. The basis for this delineation can be found in (Uhr, 1993, p. 353).

114

Appendix 1

Appendix 1: A Chronology of the 1993 Budget

Date ( Event

March 13 • ALP wins its fifth consecutive election. • Balance of power in the Senate held by a combination of the Greens (WA) Inc, the Australian Democrats and Independent Brian Harradine. May 25 • Cheryl Kernot (AD) argues her party will introduce a private members bill in the

Senate opposing the governments tax cuts on the grounds that they are inequitable (Kernot, 1993k). May 27 ! • Christabel Chamarette (GWA) moves a Notice of Motion that on the next sitting day of parliament, Budget day, a procedural motion will be introduced that placed

deadlines on Bills entering both Houses of Parliament.

August 17 • Budget speech. See Appendix 2 for details. • ACTU clearly dissatisfied with the Budget (Ferguson, 1993). • AD announce their formal response to the Budget will be released on August 30 (Kernot, 19931). August 18 I • GWA 'double deadline procedural motion passed in Senate with support of the

opposition and Harradine. • GWA indicate that it is unlikely they will reject important measures of the Budget (Chamarette, 1993a). • Dawkins at the National Press Club indicates there will be no deals done on the

Budget (Dawkins, 1993a).

August 19 • Hewson's address in reply to the Budget states that the opposition will vote against tax increases in the Budget (House of Representatives, 1993, pp. 356-362). • The minor parties provided the balance of power over these issues. August 20 • Dawkins claims at an interview: 'I am in no mood to negotiate' (Dawkins, 1993b). August 23 • Keating first indicates that negotiations are possible on the Budget as long as the

government agreed with them (Keating, 1993a).

August 24 • Poll published showing dramatic reduction in levels of government support (Tingle, 1993a). August 25 • Dawkins concedes that negotiations will take place (Dawkins, 1993a). • Initial meeting with the AD. August 26 ! • GWA first meeting with Dawkins with no specific position on the Budget (Green

et al., 1993).

August 27 • Newspaper article claims that the Accord is under threat because of the Budget, (Green et al., 1993). August 29 • Keating and Dawkins put together Bud get M ark II. August 30 • Budget Mark II released.

• AD meeting with government where Budget Mark II is agreed to. • AD 'press release: claiming 'Democrats inject half a billion of fairness into Budget' taking responsibility for pressuring the Government to alter its original Budget (Kernot, 1993e).

• Caucus meeting in which Budget was to be an issue. • ACTU congress meets (Peake, 1993d). • GWA 'not yet satisfied' (Chamarette and Margetts, 1993a). • Prismod model released. August 31 • Taxation (Deficit Reduction) Bill 1993 is referred to the SSCLCA to report by

15 September. The main issue dealt with is whether the bill should be divided into separate pieces of legislation.

115

Appendix 1

Date Event

September 2 • GWA and Dawkins meet for an second meeting on the Budget. The details of this discussion were to be kept confidential until Greens proposals be considered by the Treasurer and Treasury (Barker, 1993b).

September 7 • GWA discussion paper accidentally sent to the ABC, revealing much of the detail of the Greens Budget proposals. See appendix 4. • Excise Tariff (Deficit Reduction) Bill 1993 and Customs Tariff (Deficit Reduction) Bill introduced into the Senate.

September 8 • Willis claims there would be no more concessions on the Budget (Willox, 1993b). • Letter by Dawkins to the GWA arguing their proposals will undermine the government's economic and social strategy (Dawkins, 1993c).

September 9 • GWA and Dawkins meet to discuss Budget. Nothing is resolved.

September 10 • GWA publicly react to Dawkins position on the Budget by arguing they would challenge certain measures in the Budget, specifically the second I per cent increase in wholesales sales tax (Chamarette and Margetts, 1993b).

September 12 • Reports that GWA will not persist if the government rejected their amendments. Only to be followed by statements to the contrary (Sunday Herald Sun, 1993; Margetts, 1993a).

September 21 • Dawkins indicates that the Taxation (Deficit Reduction) Bill will be divided into eight bills but that bringing forward the date of the income tax cuts would be linked to the successful passage o f the rest of the Budget (Dawkins, 19 93a).

September 29 • Sales Tax (Customs) (Deficit Reduction) Bill, Sales Tax (Excise) (Deficit Reduction) Bill, Sales Tax (General) (Deficit Reduction) Bill, Sales Tax (In Situ Pools) (Deficit Reduction) 1993 and Sales Tax Assessment Amendment (Deficit Reduction) 1993 read for the first time. • Taxation (Deficit Reduction) Bill (No.1) 1993, Taxation (Deficit Reduction) Bill

(No.2) 1993, and the Taxation (Deficit Reduction) Bill (No.3) 1993 read for the first time. October 5 • Taxatio n (Deficit Reductio n) Bill (No.3) 1993 rea d for the second tim e. October 6 I • The majority of the SSCLCA finds that it reasonable for the government to test the constitutionality of its Taxation (Deficit Reduction) Bill (No.2). • Taxation (Deficit Reduction) Bill (No.3) 1993 read for the third time.

October 7 • Sales Tax (Customs) (Deficit Reduction) Bill, Sales Tax (Excise) (Deficit

Reduction) Bill, Sales Tax (General) (Deficit Reduction) Bill read for the second time. • Sales Tax (In Situ Pools) (Deficit Reduction) 1993 and Sales Tax Assessment Amendment (Deficit Reduction) 1993 read for the third time.

October 8 • GWA threaten to block sales tax bills, rather than to amend them, unless the inequitable nature of wholesale sales tax were addressed (Kingston, 1993b).

October 13 • Report that Harradine (IND) will support the government's sales tax increases if the marine fuel levy is dropped (Davies, 1993b). The Government further attempted to win Harradine's support by offering a boost to the subsidy on freight between the mainland and Tasmania (Garran, 1993c).

October 14 • Deal with the large wine industry organisations and the Democrats agree to support the government's legislation (Lees, 1993).

October 15 • GWA confirm their threat to block legis lation in a letter to Keating. October 16 F • Government indicates that it is going to drop changes to the fringe benefits tax in its Taxation (Deficit Reduction) Bill (No.1) 1993 (Dwyer and Burton, 1993) October 19 • GWA meet with Keating and accept a $144 million compensation package for low

116

Appendix 1

Date Event

income earners offered. As a result of this meeting they also back down on their threats on the wine tax (McKenzie, 1993c; McKenzie, 1993d; Peake, 1993c; Chamarette and Margetts, 1993c). • Coulter (AD) issues a press release suggesting that the Democrats might vote

against the bill if the Government failed to support a plan for a $50 million program to increase ethanol production (Senate, 1993b, p. 2113). • AD Senators met with Bob McMullan (ALP). Government and ADs agree to a $20 million bounty scheme which would encourage the production of ethanol

(Millett and Davies, 1993). • Excise Tariff (Deficit Reduction) Bill 1993 and Customs Tariff (Deficit Reduction) Bill read a second time. • Taxation (Deficit Reduction) Bill (No. 1) 1993 read for a second time. • Government indicates that it is planning to make significant amendments to the

Taxation (Deficit Reduction) Bill (No.!) 1993 based on the Senate Standing Committee on Finance and Public Administration, Report on the Provisions of the Taxation (Deficit Reduction) Bill (No. 1) Concerning the Taxation Treatment of Credit Unions recommendations (Senate, 1993b, p. 2148). • Senate does not press requests on the Sales Tax (Customs) (Deficit Reduction)

Bill, Sales Tax (Excise) (Deficit Reduction) Bill, Sales Tax (General) (Deficit Reduction) Bill. October 20 • Sales Tax (Customs) (Deficit Reduction) Bill, Sales Tax (Excise) (Deficit

Reduction) Bill, Sales Tax (General) (Deficit Reduction) Bill read for the third time. • Taxation (Deficit Reduction) Bill (No.2) read fo r a third time. October 21 • House of Representatives rejects all requested amendments to the Excise Tariff (Deficit Reduction) Bill 1993 and Customs Tariff (Deficit Reduction) Bill except the one by Harradine (IND) to the Excise Tariff (Deficit Reduction) Bill. • Senate passes the Excise Tariff (Deficit Reduction) Bill without the amendments. • Senate eventually passes the Customs Tariff (Deficit Reduction) Bill without the requested amendment after a lengthy procedural debate regarding whether a motion by Senator Evans (Government leader in the Senate) that the requests be not pressed, having being negatived on an equal vote, could be followed by a motion that the requests be pressed. • Third reading of the Excise Tariff (Deficit Reduction) Bill 1993 and Customs Tariff (De ficit Reduction) Bill. October 26 • Taxation (Deficit Reduction) Bill (No.1) 1993 read for the third time. • House of Representatives passes the amended version of the Taxation (Deficit Reduction Bill ) (No.3) 1993.

October 1 for the House of Representatives and 29 October for the Senate.

This was a revision of the Macklin motion (Odgers, 1995, pp. 254-255).

117

Appendix 2

Appendix 2: Budget Bills: A Detailed Chronology

Taxation (Deficit Reduction) Bill 1993

The Taxation (Deficit Reduction) Bill, or what was referred to as the Omnibus Bill, contained all of the governments revenue raising measures.

Taxation (Deficit Reduction) Bill 1993

Date Action Moved by ':. Description Ayes Noes Result

Aug 30 Procedural: Hill (LIB) Early consideration of COAL: 30 j ALP: 22 Negatived

suspension of standing j the reference of the bill AD: 6 30:31

orders by the SSCLCA. GWA: 2

IND: I

Aug 31 Reference to Hill (LIB) ( To consider the Passed

Committee: to the I constitutionality of the

SSCLCA j bill.

Bill is referred to the SSCLCA to report by September 15. The main issue dealt with is whether the bill should be divided into separate pieces of legislation.

Sept I Procedural: Tabling of Hill (LIB) ; Suspension of standing COAL: 32 ALP: 26 Affirmative Documents— ! orders required because GWA: 2 ; AD: 7 35: 33

suspension of standing j the government did not IND: I

orders, agree to accept motion

as formal.

Procedural: tabling of Spindler (AD) COAL: 31 i ALP: 25 Affirmative

Documents—legal AD: 6 40:25

opinion (amendment). ; GWA: 2

IND:

Procedural: tabling of Hill (LIB) COAL: 31 I ALP: 25 Affirmative

Documents—legal AD: 6 i 40:25

opinion (amendment). j GWA: 2

IND: I

Sept 6 Committee's brief extend to report back by September 20.

Sept 7 First Reading Sherry (ALP) j

Second Reading Sherry (ALP) Debate adjourned until Committee returns.

Sept 20 Committee's Report released: issue of constitutionality unresolved, determines that only the High Court can decide. But finds that: '...that there is a real risk which is significant that the High Court would find the bill, if enacted, to be a law imposing taxation within the meaning of s. 55 of the Constitution' (Parliament, 1993a, p. 1). Dissenting reports found that the bill should be split (Parliament, 1993a, pp. 8, 19). Dawkins reacts angrily to the Report: 'It doesn't advance the legal issues one jot (Dawkins, 1993e).

Sept 21 Dawkins indicates that the bill will be divided into eight bills but that bringing

forward the date of the income tax cuts would be linked to the successful passage of the rest of the Budget (Dawkins, 1993d). Sept 27 Amendment: to Hill (LIB) ' Requests action by the Affirmative

condemn Treasurer

Oct 19 Procedural: to take Chapman Affirmative

note of report by (LIB)

SSCLCA

119

Appendix 2

Sales Tax (In Situ Pools)

The purpose of this Bill was to increase the rates of sales tax on in-ground swimming pools. Because of a High -Court decision in 1992 a separate Bill

was required to changes levels of sales tax on pools and remain

unquestionably constitutionally valid. Debate on in situ pools tended to be

subsumed by the wider debate on sales tax increases. The only reason why

it was placed in separate legislation was because of the High Court ruling

on the issue. Unlike the preceding series of sales tax Bills, the question of

wine tax was not at stake. Rather, the first and second tranche of sales tax

increases were the principle issues.

Sales Tax (In Situ Pools) (Deficit Reduction) Bill 1993

Date Action Moved by Description Ayes Noes Result

Sept 29 First reading Collins (ALP)

Oct 6 Second reading Collins (ALP)

Declaratory motion Short (LIB) Not to bind future Affirmative

Senates to the constitutionality of these bills under s. 53 and s. 55 (Senate,

1993a, p. 388).

Oct 7 Declaratory motion Short (LIB) Condemned measures COAL: 31 1 ALP: 25 Negatived that jeopardised the ! AD: 7 31:35

wine industry's future GWA: 2

and increased the IND:

burden of indirect taxation on the community (Senate, 1993a, p. 1788).

Amendment to Lees (AD) Condemns the bills COAL: 29 ALP: 25 Affirmative

condemn impact on the wine tax AD: 7 IND: 1 38: 26

(Senate, 1993a, p. 401). GWA: 2

Second reading Collins (ALP) Affirmative

(amended bill) Request amendment Short (LIB) Omit first round of Negatived

wholesale sales taxes on in-ground pools (amendment 5 and 7).

Request amendment Short (LIB) Omit second round of COAL: 31 ALP: 25 Negatived wholesale sales taxes IND: I AD: 7 32: 34

on in-ground pools GWA: 2

(amendments 6 and 8).

Third reading McMullan Agreed to

(ALP)

120

Appendix 2

Sales Tax Assessment Amendment (Deficit Reduction) Bill

1993

The purpose of this Bill was to split the rate of sales tax on luxury cars. This Bill was the only one of the eight Budget Bills that no party attempted to amend, with the Greens, Democrats and Coalition all supporting the measures it involved (Senate 1993a, p. 1788; Senate 1993b p. 1818). The

Bill was read for a second time on October 6 and agreed to on October 7 and was only referred to in passing during the debate on the other Sales Tax Bills.

Sales Tax Assessment Amendment (Deficit Reduction) Bill 1993 Date Action Moved by Description Ayes Noes Result

Sept 29 First reading Collins (ALP)

Oct 6 Second reading Collins (ALP)

Declaratory motion Short (LIB) Not to bind future Affirmative

Senates to the constitutionality of these bills under s. 53 and s. 55 (Senate,

1993a, p. 370).

Oct 7 Declaratory motion Short (LIB) Condemned measures COAL: 31 ALP: 25 Negatived

that jeopardised the AD: 7 31:35

wine industry's future GWA: 2

and increased the IND: I

burden of indirect taxation on the

• community (Senate,

1993b, p. 1788).

Amendment to Lees (AD) Condemns the bills COAL: 29 ALP: 25 Affirmative

condemn impact on the wine tax AD: 7 IND: 1 38: 26

(Senate, 1993a, p. 401). GWA: 2

Second reading Collins (ALP) Affirmative

(amended bill) Third reading McMullan Agreed to

(ALP)

121

Appendix 2

Taxation (Deficit Reduction) Bill No 1

This bill included:

• increases in the medicare levy low income thresholds;

• removal of the concessional treatment that applies to the taxation of unused annual leave and long service leave;

• changes in the taxation treatment of excess domestic travel allowances

and expenses and certain non-deductible expenses;

• denial of income tax deduction for car parking expenses for self-employed persons;

• changes in the taxation treatment of credit unions (Parliament, 1993b, pp. 326-7).

Taxation (Deficit Reduction) Bill (No.1) 1993

Date Action Moved by Description Ayes Noes Result

Sept 29 First reading Collins (ALP)

Second reading Collins (ALP)

Sept 30 Foreman Passed

(ALP) Selection of Bills Committees refers the bill to the SSCLCA to consider the bill's constitutionality

Oct 6 The majority of the Committee's members (ALP) adopted the position that the bill

should be introduced in its current form while the three Coalition members of the Committee and the one Australian Democrat Senator, Sid Spindler, all argued that there was a real risk that the High Court would find the Bill unconstitutional and demanded that the two subjects of taxation be separated (Parliament, 1993b, pp. 332, 334).

Procedural Hill (LIB) Motion to withdraw COAL: 30 ALP: 24 Negatived

and redraft bill IND: I AD: 7 31:31

Debate adjourned pending the findings of the Senate Standing Committee on Finance and Public Administration, Report on the Provisions of the Taxation (Deficit Reduction) Bill (No. 1) Concerning the Taxation Treatment of Credit

Unions which was to be tabled on 18 October.

Oct 18 Tabling of Senate The Committee was highly critical of the application of the legislation to small Standing Committee credit unions and co-operative building societies. It recommended the Government on Finance and Public consult with these institutions to ensure that the social benefits resulting from their Administration, presence be retained and that the competitive disadvantages they faced following Report on the the introduction of the new tax be addressed. By the time debate on the bill had Provisions of the begun on 19 October the Government indicated that it was planning to make

Taxation (Deficit significant amendments based on the Committee's recommendations (Senate, Reduction) Bill (No. 1993b, p. 2148). 1) Concerning the Taxation Treatment of

122

Appendix 2

Taxation (Deficit Reduction) Bill (No.1) 1993

Date Action Moved by Description Ayes Noes Result

Credit Unions

Government indicates that it is going to drop changes to the fringe benefits tax (Dwyer and Burton, 1993).

Oct 19 Government indicates that it is planning to make significant amendments based on

the Committee's recom mendatio ns (Senate, 1993b, p.2 I48). Declaratory motion Hill (LIB) Not to bind future Affirmative

Senates to the constitutionality of these bills under s. 53 and s. 55 (Senate,

1993a, p. 632).

Amendment to Hill (LIB) Condemn the COAL: 31 ALP: 25 Negatived

condemn government and to call IND: I AD: 7 32: 34

it to abandon pr oposals. GWA: 2

Second reading Collins (ALP) Affirmative

Procedural Hill (LIB)) That the committee Passed

report progress and asked leave to sit again.

Oct 20 Amendment Hill (LIB) To divide the bill into Negatived

four separate bills to ensure its constitutionality.

Request amendment Hill (LIB) To delete the provision Agreed to

to remove the concessional tax treatment that applied to payments of the accrued Annual Leave (Senate, I993b, p. 2185).

Amendment Kemot (AD) Retain mutuality for AD: 7 ALP: 20 Negatived

credit unions and co- GWA: 2 COAL: 10:48

operative building IND: 1 28

societies.

Request for McMullan To bring bill into line Agreed to

amendment (ALP) with the

recommendations of the Report on the Provisions of the Taxation (Deficit Reduction) Bill (No. I)

Concerning the Taxation Treatment of Credit Unions

Request for McMullan To omit matters dealing Agreed to

amendment (ALP) with the FBT

Oct 26 Third reading McMullan Affirmative

(ALP)

123

Appendix 2

Taxation (Deficit Reduction) Bill No. 2

Taxation (Deficit Reduction) Bill No. 2 contained the following measures:

an increase in the rate of fringe benefit tax (FBT); and

a change in the taxation treatment of friendly societies, including an increase in the rate of tax on their life insurance business to bring it into line with the rate of tax on similar business undertaken by life companies (Parliament, 1993b, p. 327).

Taxation (Deficit Reduction) Bill No. 2 was designed by the government with the intention of acting as a test Bill. The idea was to place two relatively insignificant taxation measures (increases in the rates of the FBT and increases in the levels of tax on life insurance businesses) together to

see whether or not the High Court would interpret these increases as an

imposition of tax and therefore constitutionally invalid.

Taxation (Deficit Reduction) Bill (No.2) 1993

Date Action Moved by Description Ayes Noes Result

Sept 29 First reading Collins (ALP)

Second reading Collins (ALP)

Sept 30 Foreman Selection of Bills Passed

(ALP) Committees refers the

bill to the SSCLCA to consider the bill's constitutionality

Oct 6 The view that was put by the majority of this Committee and

supported by Spindler (AD) was that the Government should be able to test whether it was entitled to construct legislation in this manner (Senate, 1993a, p. 1743; Parliament, 1993b, pp. 329, 335). The Opposition Senators in the Committee disagreed declaring that it was inappropriate for the Senate to pass 'a bill of such doubtful constitutionality' (Parliament, 1993b, p. 332).

Procedural Hill (LIB) Motion to withdraw Debate

and redraft bill interrupted

Amendment to the Spindler Amendment to omit Negatived

motion to withdraw (AD) paragraphs that state

and redraft bill that the Senate

'deplores' the test case bill and demands the treasurer to redraft the test case bill.

Procedural (cont) Hill (LIB)) Motion to withdraw COAL: 30 ALP: 24 Negatived

and redraft bill IND: I AD: 7 31: 31

Oct 19 Declaratory motion Hill (Lib) Not to bind future Affirmative

124

Appendix 2

Taxation (Deficit Reduction) Bill (No.2) 1993

Date Action I Moved by Description Ayes Noes Result

Senates to the constitutionali ty of these bills under s. 53 and s. 55 (Senate,

1993a, p. 632).

Declaratory motion Hill (LIB) Dubious COAL: 31 ALP: 25 Negative

constitutionality of the IND: I AD: 7 32: 34

bills. That they should GWA: 2

be broken in two (Senate, 1993a, p. 632).

Oct 20 Second reading Collins (ALP) ^ Affirmative

Request for Hill (LIB) Divide into two bills. COAL: 30 ALP: 23 Affirmative

amendment IND: I AD: 7 31:30

Request for Hill (LIB) I Reconsideration of COAL: 31 ALP: 25 Negatived

amendment Hill's (above) request. IND: I AD: 7 32: 32

Third reading McMullan Agreed

(ALP)

125

Appendix 2

Taxation (Deficit Reduction) Bill (No. 3) 1993

This bill linked the commencement of personal tax cuts (the 'L.A.W.' tax cuts) to the successful passage of other Budget Bills.

Taxation (Deficit Reduction) Bill (No.3) 1993

Date Action Moved by Description Ayes Noes Result

Sept 29 First reading Collins (ALP)

Second reading Collins (ALP)

Oct 5 Amendment to Short (LIB) Deplores government's Affirmative

condemn attempt to link bill with

other Budget bills

Declaratory motion Short (LIB) Not to bind future Passed

Senates to the constitutionality of these bills under s. 53 and s. 55 (Senate,

1993a, p. 370).

Second reading Collins (ALP) ALP: 27 COAL: Affirmative

AD: 7 33 36: 34

GWA: 2 IND: I

Oct 6 Amendment Short (LIB) Remove links to other COAL: 29 ALP: 23 Affirmative

bills AD: 7 39: 23

GWA 2 IND: I

Amendment Margetts Increase level of tax to AD: 7 ALP: 22 Negatived

(GWA) 52 per cent for incomes GWA: 2 COAL: 9: 52

over $100 000 29

IND:

Third reading McMullan Agreed to

(ALP)

Oct 26 House of Representatives passes amended bill.

126

Appendix 3

Appendix 3: Public Opinion and the 1993 Budget

One of the distinctive features of the 1993 Budget was its lack of popularity and the electorate's support for non-governing parties negotiating for changes. The following tables give an indication of the continuing level of public dissatisfaction with the Budget and the popular legitimacy enjoyed by the minor parties as they negotiated for change.

Table A3.1: AGB McNair Poll, 31 August 1993

Overall, would you say that you approve or disapprove' of this year's federal Budget9

1992 1993

Approve 24 16

Disapprove 49 73

Uncommitted 27 11

Do you think you personally will be better off or worse off as a result of this Budget'? ' .. _... .. .,., . 1992 1993

Better off 14 3

Worse off 34 62

Little difference 52 35

Do you think the opposition parties should support or oppose the Budget in the Senate Support 26

Oppose 63

Uncommitted 11

Source: The Bulletin 31 August 1993.

Table A3.2: Saulwick Poll, 4 September 1993

What political'party'would you vote'for?

Party %

ALP 26

COAL 49

AD 12

Others 13

Source: Sydney Morning Herald 4 September 1993

127

Appendix 3

Table A3.3: Saulwick Poll, 7 September 1993

Was the use of power by the Australian Democrats and minor parties in the Senate to force changes in the Budget proper or not proper?

Total ALP COAL AD

Proper 74 64 79 86

Not proper 19 30 16 9

Don't know 7 6 6 5

Source: Sydney Morning Herald 7 September 1993.

Table A3.4: Newspoll Conducted 17 September 1993

Agreement to pass the Budget by Parliament is being delayed by the two Western Australian Greens senators." To overcome the deadlock, which one of the options do you personally support the most?'

Total ALP COAL Other party

The government should make further changes to 67 58 74 73

the Budget The Western Australian Greens senators should 22 35 16 17

agree to support the Budget as it is currently proposed Uncommitted 11 7 10 10

Source: Australian 22 September 1993.

128

Appendix 4

Appendix 4: Senate Election Results: 1910-1996

Total Number Conservative parties ALP

Election Govt Senate of Election outcome Total Senate Election outcome Total Senate

size Senators votes seats seats seats seats votes seats seats seats seats

elected % no. % no. % % no. % no. %

1910 ALP 36 18 45.6 0 0.0 13 36.1 50.3 18 100.0 23 63.9

1913 CON 36 18 49.4 7 38.9 7 19.4 48.7 11 61.1 29 80.6

1914 ALP 36 36 47.8 5 13.9 5 13.9 52.2 31 86.1 31 86.1

1917 CON 36 18 55.4 18 100.0 24 66.7 43.7 0 0.0 12 33.3

1919 CON 36 19 55.2 18 94.7 35 97.2 42.8 1 5.3 1 2.8

1922 CON 36 18 42.0 8 44.4 24 66.7 45.7 11 61.1 12 33.3

1925 CON 36 22 54.8 22 100.0 28 77.8 45.0 0 0.0 8 22.2

1928 CON 36 19 50.4 12 63.2 29 80.6 49.0 7 36.8 7 19.4

1931 CON 36 18 55.4 15 83.3 26 72.2 41.4 3 16.7 10 27.8

1934 CON 36 18 52.6 18 100.0 33 91.7 41.3 0 0.0 3 8.3

1937 CON 36 19 46.7 3 15.8 20 55.6 48.5 16 84.2 16 44.4

1940 CON 36 19 50.4 16 84.2 19 52.8 47.0 3 15.8 17 47.2

1943 ALP 36 19 39.1 0 0.0 14 38.9 55.1 19 100.0 22 61.1

1946 ALP 36 19 43.3 3 15.8 3 8.3 52.1 16 84.2 33 91.7

1949 CON 60 42 50.4 23 54.8 26 43.3 44.9 19 45.2 34 56.7

1951 CON 60 60 49.7 32 53.3 32 53.3 45.9 28 46.7 28 46.7

1953 CON 60 32 44.4 15 46.9 31 51.7 50.6 17 53.1 29 48.3

1955 CON 60 30 48.8 17 56.7 30 50.0 40.6 12 40.0 28 46.7

1958 CON 60 32 45.2 16 50.0 32 53.3 42.8 15 46.9 26 43.3

1961 CON 60 31 42.1 16 51.6 30 50.0 44.7 14 45.2 28 46.7

1964 CON 60 30 45.7 14 46.7 30 50.0 44.7 14 46.7 27 45.0

1967 CON 60 30 42.8 14 46.7 28 46.7 45.0 13 43.3 27 45.0

1970 CON 60 32 38.2 13 40.6 26 43.3 42.2 14 43.8 26 43.3

1974 ALP 60 60 43.9 29 48.3 29 48.3 47.3 29 48.3 29 48.3

1975 CON 64 64 51.7 35 54.7 35 54.7 40.9 27 42.2 27 42.2

1977 CON 64 34 45.6 18 52.9 35 54.7 36.8 14 41.2 26 40.6

1980 CON 64 34 43.5 15 44.1 31 48.4 42.3 15 44.1 27 42.2

1983 ALP 64 64 39.9 28 43.8 28 43.8 45.5 30 46.9 30 46.9

1984 ALP 76 46 39.5 20 43.5 33 43.4 42.2 20 43.5 34 44.7

1987 ALP 76 76 42.0 34 44.7 34 44.7 42.8 32 42.1 32 42.1

1990 ALP 76 40 41.9 19 47.5 34 44.7 38.4 15 37.5 32 42.1

1993 ALP 76 40 43.0 19 47.5 36 47.4 43.5 17 42.5 30 39.5

1996 CON 76 40 44.0 20 50.0 37 48.7 36.2 14 35.0 29 38.2

Source: Newman, 1993; Newman and Kopras, 1996; Hughes and Graham, 1968.

129

Appendix 5

Appendix 5: Data Relating to the Breakdown of Motion

Types in Senate Dealings with the 1993 Budget Bills

There were no surprises when it came to the types of motions initiated by various parties in the Senate's consideration of the 1993 Budget bills. Most of the routine motions (motions that are moved as a part of the ordinary processes associated with the passage of bills through the Senate, such as first reading, etc. and are therefore typically the government's responsibility) were moved by the government and the bulk of the amendments were moved by the opposition. This appendix is designed to provide additional information to those interested in the breakdown of motion types.

Table A5.1 Party Support for ALP Initiated Actions

All actions Routine Amendments Procedural

No. % No. % No. % No. %

Total actions 44 35 2 0 7 0

Success 43 98 35 100 2 100 6 86

Divisions 13 6 0 0 7 0

Success 12 92 6 100 0 0 6 86

AD 13 100 6 100 0 0 7 100

GWA 10 77 6 100 0 0 4 57

Harradine (IND) 9 69 3 50 0 0 6 86

Coalition 0 0 0 0 0 0 0 0

131

Appendix 5

Figure A5.1: Levels of Minor Party Support for ALP Initiated Motions

14 -

12-

10 _ t qAII motions

U n Routine

0 8 -

m

q Procedural

0 6 -

6 z

2 -

AD GWA Harradine COAL

(IND)

Party

Table A5.2: Party Support for Coalition Initiated Motions

All motions Routine Amendments Procedural Declaratory

motions

No. % No. % No. % No. % No. %

Total motions 91 1 63 13 14

Success 34 37 1 100 21 33 4 31 8 57

Divisions 33 0 18 9 6

Success 11 33 0 9 50 3 33 0 0

AD 5 15 0 4 22 1 11 0 0

GWA 10 30 0 8 44 2 22 0 0

Harradine (IND) 18 55 0 12 67 5 56 1 17

ALP 0 0 0 0 0 0 0 0 0

132

Appendix 5

Figure A5.2: Levels of Minor Party Support for Coalition Initiated Motions

18 -16 - DAll motions

14

nAmendments O Procedural

0 12 ti 0 Declaratory motions

I1E 0 Z 4

2 -

Democrats Green Harradine ALP

Party

Table A5.3: Party Support for Australian Democrat Initiated Motions

All motions Amendments Procedural

No. % No. % No. %

Total motions Success

8

6 75

7 5 100

1 1 100

Divisions Success

7 6 86

6 5 83

1 1 100

GWA 7 100 6 100 1 100

Harradine (IND) 2 29 1 17 1 100

ALP i 0 0 0 0 0 0

COAL 6 86 5 0 1 100

133

Appendix 5

Figure A5.3: Levels of Party Support for Australian Democrat Initiated Motions

Table A5.4: Party Support for Green (WA) Inc Initiated Motions

IAn motions Amendments

Total motions Success 10 10

Divisions Success

12 j0

j2 0

AD 2 12

Harradine (IND) 0 0

ALP 0 0

COAL 10 !0

Table A5.5: Party Support for Harradine (IND) Initiated Motions

All motions Procedural

Total motions j 1

Success J1

1 1

Divisions 10 0

134

Appendix 5

Table A5.6 Motions Initiated by Parties and Levels of Success (by motions type)

Routine Amendments/ requests Procedural Declaratory motions

Tota l Success Total Success Total Success Total Success

No. % No. % No. % No. % No. % No. % No. % No.

ALP 35 97 34 97 2 3 2 7 7 33 6 50 0 0 0 0

COAL 1 3 I 3 63 82 21 72 13 62 5 42 14 100 8 100

AD 0 0 0 0 7 • 9 5 17 1 5 1 8 0 0 0 0

GWA 0 0 0 0 4 5 0 0 0 0 0 0 0 0 0 0

IND 0 0 0 0 1 1 I 3 0 0 0 0 0 0 0 0

Total 36 35 77 29 21 12 14 8

Figure A5.5: Motions Initiated by Parties by Type

70 -

OALP

60-

•COAL

50- DAD

OGWA

o 40 -

o n Ind

E

30-

6 z

20 -

10 -

Al_

Routine Amendments Procedural DeclaratorymotionsMotion type

135

Appendix 5

Figure A5.6: Successful Actions Initiated by Parties by Type

35 -

OALP

30 - •COAL

0 25 DAD

0 E q GWA

20-

MIND

15

N

10-

a z

5-

Routine Amendments Procedural Declaratory

motions

Type of motion

136

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