Chapter 13 - Financial legislation


Proceedings in the Senate in relation to financial legislation are often discussed without regard to the terms of section 53 and with the use of terms such as “supply” and “money bills”, which confuses the discussion. There has also always been considerable confusion about the processes by which the Parliament appropriates money for the operations of government and the terminology applying to those processes. The word “supply” has come to be used for virtually any appropriation of money, and any rejection or amendment by the Senate of any appropriation bill, or even any bill having any financial content, is liable to be referred to as “blocking supply”.

In order to clear up the confusion it is necessary first to clarify the terminology. Strictly speaking, supply was the money granted by the Parliament in the supply bills which, before the change in the budget cycle in 1994, were usually passed in April-May of each year, and which appropriated funds for the period between the end of the financial year on 30 June and the passage of the main annual appropriation bills. The latter appropriate funds for the whole financial year, were formerly passed in October-November and are now passed in June. The term “supply” may be loosely applied to all of the annual appropriation bills, that is, the main annual appropriation bills, the additional appropriation bills and any supply bills, since those bills together annually provide the funds necessary for government to operate. It is not legitimate to apply the term to any other appropriation bills, or to the revenue raising measures properly called tax bills.

The term “money bills” may be used to refer to all bills which appropriate money. This includes not only the annual appropriation bills, which consist of the main appropriation bills and the additional appropriation bills, but also any other bills which appropriate money. There are many bills which appropriate money for particular purposes, and, in many of these, the appropriation is continuing and does not have to be renewed annually. Under section 53 of the Constitution bills which appropriate money may not originate in the Senate, and it is therefore legitimate to use the term “money bills” to refer to all such bills. The term “money bills” is also used, however, to refer only to that category of appropriation bills which under section 53 may not be amended by the Senate, that is, bills which appropriate money for the ordinary annual services of the government. Not all appropriation bills fall into this category. The term “money bills” is also used to include bills which impose taxation, which may not originate in the Senate. Such bills, however, are more properly called tax bills.

The term “tax bills” should properly be confined to bills which impose taxation and which, under section 53 of the Constitution, may not originate in the Senate and may not be amended by the Senate. Under section 55 of the Constitution, laws imposing taxation must deal only with one subject of taxation, and must deal only with the imposition of taxation (this provision also is further outlined below). Provisions dealing with the assessment and collection of taxation are contained in separate bills, and such bills should not be referred to as “tax bills”. A proper term for them would be “tax assessment and collection bills”.

The term “budget measures” is used to refer to all bills which put into effect the financial measures proposed in the Treasurer’s budget speech. The term covers not only the main annual appropriation bills and any bills containing increases in taxation proposed in the speech, but bills making minor adjustments to appropriations, taxes or government outlays. Thus the only distinguishing characteristic of “budget measures” is that they have been proposed in the budget speech. It is not, therefore, a useful category of bills: it does not indicate the importance of the bills, and bills appropriating money, imposing taxation or carrying out other financial measures, including bills of great importance, may not be budget measures simply because they were not referred to in the budget speech.

The conceptual confusion surrounding these categories of bills occurs because these terms are used as if they were interchangeable without any regard to the distinction between them. The terms are also used to include all bills which refer to financial matters or which have some financial implications. This category virtually includes all bills presented, because every piece of proposed legislation has some financial implications.

Appropriation bills and tax bills are the only useful categories of bills because they are the only categories which are given special treatment by the Constitution. All other bills are treated alike and the Houses have equal powers in relation to them.

The two useful categories of bills are distinguished by their defining characteristics. Money bills, which should properly be called appropriation bills, are those bills which contain clauses which state that money, of specified or indefinite amount, is appropriated for the purposes of the bills. A bill which does not have such a clause is not an appropriation bill. A tax bill is a bill which contains a clause which provides that tax is imposed upon a specified subject, either by setting a new tax or raising the level of an existing tax. A bill which does not contain such a clause is not a tax bill.

Another concept which is sometimes used in discussion is that of “measures vital to government” or “measures vital to the survival of a government”. The bills which may be regarded as falling into this category are:

(a) the annual and additional appropriation bills and any supply bills (without which government would not be able to continue to fund its various services); and

(b) tax bills which impose income tax (without which there would be insufficient revenue to appropriate in the appropriation and supply bills).

If any of these bills were not passed by the Parliament the government would not be able to continue to function. The failure to pass other bills, however, would not in normal circumstances prevent the continuing operations of government.

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