Much of the public debate on the Senate “blocking supply” suggests that it is an all or nothing tactic. However this is not the case. The Senate can carefully cherry-pick the elements in the budget that it demands be amended and force the Abbott government to either accept those amendments or see its budget fail.
This is a short explanation of the Senate’s powers and its ability to force a budget debate on its terms with the government-dominated House of Representatives.
THE BILLS
The Federal budget contains two main pieces of legislation:
• Appropriation Bill (No 1) aka “Supply Bill”: Covers the ordinary services of government — payment of public servant wages, new expenditure that has not been previously approved, payments to local government etc.
• Appropriation Bill (No 2): This deals with all other annual budget allocations for departments and agencies such as one-off capital injections.
Other piecemeal legislation will be required to implement many of the government’s cuts like those to Medicare, child care, clean energy funding and higher education.
WHAT IS IN THE SUPPLY BILL?
Many of the government’s most worrying cuts are actually contained in the supply bill — where the government is hoping it can force the house to accept them. This includes:
• $100 million from Landcare
• $43.5 million from the ABC and SBS
• $111.4 million from the CSIRO
• $28.2 million from the Australia Council for the Arts
• $74.9 million from the Australian Research Council
• $2.8 million from the Great Barrier Reef Marine
Park Authority
• The combined loss of 16,500 public servants
Unless amendments are made to this bill these cuts are guaranteed.
HOW THE BILLS CAN BE DEALT WITH
The Senate can block either or both bills. It can also amend Appropriation Bill (No 2).
While the constitution says the Senate cannot amend the Supply Bill, section 53 also says: “The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein.”
Odgers Australian Senate Practice (the most authoritative text on the Senate’s powers) takes the view that the Constitution permits the Senate to block supply and, in effect, to force amendments on the House of Representatives.
In other words, the Senate can demand the Supply Bill be amended by refusing to pass it unless amendments are made. It can provide those amendments to the House of Representatives and force the Abbott government to either accept the amendments or see the budget voted down.
Assuming this happens and there is a stand-off, then what will happen?
If the Abbott government refuses to accept the amendments and the budget fails to be adopted by July 1, then many of the ordinary services of government would continue. This is because 75% of Commonwealth expenditure is not covered by the Supply Bill, but is set out in separate acts.
These are separate appropriations and for the most part continue from year to year and are not dependent on the passing of the budget.
If the Senate blocked supply by not passing both Appropriation Bills, given that the majority of the Commonwealth’s expenditure is covered by special appropriations, most functions of government would be able to continue.
Specifically:
• Welfare payments and pensions would continue under the Social Security Act 1999
• Medicare payments would continue under the Health Insurance Act 1973, and
• Payments to the states and territories would continue under the Federal Financial Relations Act 2009
If both bills were blocked, then the regressive proposed changes to the public service, CSIRO, the ABC and Landcare would be stopped. The balance of the cuts can also be blocked when the government presents these additional bills to parliament.
The main negative effect of blocking supply would be to starve Commonwealth departments of the funds necessary to make periodic wages payments to public servants. While departments may have funds available from prior years' appropriations, these would be quickly depleted. A likely result would be that public servants would either have required to work without periodic payment or be stood down for a period.
However, as public servants have a contractual relationship with the Commonwealth, the
Commonwealth would remain liable to make the necessary wages payments in due course. The effect would be to delay the payment of public servants for the period of any impasse in the Senate.
Essentially it is not a case of all or nothing for the Senate. The Senate can choose the grounds on which to fight the budget, for example refusing to agree to cuts to local government funding, welfare, schooling, health and the environment.
With both the Supply Bill and the balance of the budget the Senate can target the debate to the deeply unpopular and unfair elements in the budget. This will force the Abbott government to either agree to these fair amendments or see its entire budget defeated with the consequential shut down of much of the government.
[David Shoebridge is a NSW Greens MLC. This article was first published in Green Voices.]