Chapter 13 - Financial legislation

Procedure on financial legislation

Except as described in this section, financial bills are proceeded with by the Senate in the same way as other bills.

The motion for the first reading of bills which the Senate may not amend, unlike the equivalent stage of amendable bills, is debatable (SO 112(2)). This variation in respect of non-amendable bills is necessary because, in compliance with the provision of section 53 of the Constitution that a request for an amendment may be made at any stage, requests may be moved on the motion for the first reading of such a bill (see below).

In debate on the motion for the first reading, matters not relevant to the subject matter of the bill may also be discussed (SO 112(2)). The purpose of this provision is to provide the Senate with a further opportunity to debate matters of general interest, and, on each piece of financial legislation, to discuss the general financial policy of the government.

In proceedings on bills which the Senate may not amend, requests for amendments may be made at any of the following stages of a bill:

(a) On the motion for the first reading of the bill.

(b) In committee after the second reading has been agreed to.

(c) On consideration of any message from the House of Representatives referring to the bill.

(d) On the third reading of the bill (SO 140(1)).

This standing order puts into effect the provision of section 53 of the Constitution that the Senate may make a request for an amendment at any stage of the consideration of a bill.

The motion for the second reading of a bill, however, is not included in the list of stages at which requests may be made. This provision was adopted on the basis that the second reading debate should be confined to the principles of a bill and the question of whether it should be passed subject to any subsequent requests. The Senate is not excluded, however, from making requests on the second reading, and may do so if this is appropriate (statement by President Gould, SD, 9/9/1909, p. 3225. For an early precedent of a request at the second reading, see Supply Bill (No. 1) 1901, 14/6/1901, J.35-6). Requests to be moved to the second reading of the Customs Tariff Amendment Bill (No. 2) 2001 and the Excise Tariff Amendment Bill (No. 1) 2001 were circulated in April 2001, but were not moved when the government agreed to amend the bills by way of requests moved in committee of the whole (the requests at second reading would have sought the division of the bills).

Under the expedited method for the introduction of bills, the motion for the first reading is dealt with together with other procedural motions and is now treated purely as a formal step. The second reading has therefore replaced the first reading as the first stage at which a request may effectively be moved.

For a precedent of a request moved on the motion for the first reading, see Customs Tariff Bill 1933, 31/5/1933, J.220. The request, motion for which was negatived, sought the return of the bill to the House of Representatives for the purpose of its amendment along certain lines which were indicated in the motion in a general way. For further precedents for requests moved on the motion for the first reading, see Appropriation Bill 1954-55, 28/9/1954, J.39; Appropriation Bill 1956-57, 16/10/1956, J.171. For a further precedent of a request in general terms, see Social Security (Home Child Care and Partner Allowances) Legislation Amendment Bill 1994, 24/3/1994, J.1504-6, 1523-6.

In practice, requests for amendments of non-amendable bills are now usually made during the committee of the whole stage.

If a request for an amendment is made at any stage, the bill is then returned to the House of Representatives with the request for amendment, and the bill is not further proceeded with by the Senate until the request has been dealt with (SO 140(4)). When requests for amendments are agreed to in committee of the whole, the report of the committee is adopted by the Senate, the bill is returned to the House of Representatives with the requests, and the third reading of the bill is not moved until the requests have been dealt with (SO 129(1)).

Bills which the Senate may amend but which are subject to requests for amendments are dealt with in the same way. If the Senate makes both requests and amendments in relation to a bill, the bill is returned after the committee stage to the House of Representatives with the requests, and when the requests are dealt with the bill is again returned with a message asking for concurrence of the House with the amendments (SO 129). The message forwarding the requests, however, also sets out the amendments which the Senate has made to the bill. The rationale of this procedure is that the House should know of all the amendments required by the Senate before it deals with the Senate’s requests. The House cannot actually deal with the Senate’s amendments, however, until the requests have been disposed of and the Senate has passed the bill.

When the House makes amendments requested by the Senate and makes further amendments to the bill, the bill is not read a third time until the Senate has agreed to the House amendments (23/8/1999, J.1512, 1533; 18/10/1999, J.1922).

The Senate has dealt with requests suggested by the House of Representatives in substitution for Senate requests: 15/4/1986, J.898-9; 16/4/1986, J.904-12; 17/4/1986, J.917-8.

It is open to the Senate to request an amendment to a bill which is otherwise amendable as an alternative to amendments to the bill to which the House of Representatives has disagreed (see Chapter 12, Legislation, under Disagreement of House with Senate amendments). For example, in respect of an appropriation bill not for the ordinary annual services, the Senate may make amendments to the bill, and when the House of Representatives disagrees with the amendments the Senate may request an amendment to increase the amount of the appropriation as an alternative to the original Senate amendments disagreed to by the House. In that circumstance the Senate’s non-insistence on its amendments is conditional upon the House making the requested amendment; it is not open to the House to decline to make the requested amendment and forward the bill for assent on the basis that the Senate had not insisted on its amendments. When the House has dealt with the Senate’s requests the bill is returned for the Senate’s final agreement ( 27/6/1996, J.431-3; 28/6/1996, J.442).

If the Senate amends a bill and the House of Representatives returns the bill with a suggestion that any amendments should have been made in the form of requests, the Senate, if it agrees with this suggestion, may then return the bill with requests, and after such requests have been dealt with any Senate amendments not resolved may be dealt with in accordance with procedures for amendments (SO 130). (For precedents of amendments changed to requests, see Sugar Bounty Bill 1903, 15, 22, 23, 24/7/1903; J.67, 80, 83, 87; Local Government (Financial Assistance) Amendment Bill 1992, 25/6/1992, J.2621, 2632, 2641.) In this circumstance also the Senate should make its non-insistence on its amendments conditional upon the requested amendments being made. In 1997 the government in the House of Representatives adopted the device of rejecting requests which its advisers claimed should have been amendments, but making identical amendments to the bill and then asking the Senate to agree to the amendments. This appears to have been resorted to as a means of saving time at the end of a period of sittings (Social Security and Veterans’ Affairs Legislation Amendment (Family and Other Measures) Bill 1997; see statement by Chair of Committees, SD, 2/12/1997, pp 10130-31.)

In committee of the whole on a bill which the Senate may not amend, the following procedures are followed:

(a) The Chair calls on each clause or item, and puts the question — That the clause or item be now passed without requests.

(b) If motions for requests are moved and passed, the Chair puts a further question —That the clause or item be now passed, subject to the requests being complied with.

(c) If either of those questions is negatived, it is again proposed by the Chair, and consideration of the clause or item may continue until either question is agreed to. (SO 140(3))

The reason for the questions in relation to clauses or items being put in this form, rather than the question for an amendable bill, that the clause stand as printed, is that the Senate cannot amend the bill by negativing a clause as it can with an amendable bill.

If the committee, by majority vote, continues to negative the question that the clause or item be now passed without requests, or be now passed subject to requests being complied with, this means that the committee wishes to continue to consider the clause or item in question.

In 1993, in relation to the Customs Tariff (Deficit Reduction) Bill 1993 and the Excise Tariff (Deficit Reduction) Bill 1993, the question arose of the effect of the negativing of either of those questions by an equally divided vote, which would raise the possibility of the committee being unable to proceed to a subsequent clause of a bill. Although a formal ruling was not given on this question by the chair, it was suggested in an advice provided to the President and to senators by the Clerk of the Senate that, in this situation, the Chair of Committees should indicate to the committee that if there are no further requests to be moved the clause is passed without requests and the committee proceeds to the next clause.(For text of advice, see SD, 21/10/1993, p. 2448.) The rationale of this ruling would be that making a request is the only action the committee can take on the clause of a non-amendable bill, although, of course, at the third reading stage the Senate can reject the whole bill.

At the request of any senator a clause or item under consideration is divided (SO 140(3)(d)).

Consideration of a clause or item may be postponed, as with an amendable bill. (For postponement of items until documents tabled, see 28/5/1992, J.2349-50; for deferral of bills until information provided, see 20/5/1975, J.655-7; 12/8/2003, J.2089-90; 1/4/2004, J.3324-5; separate consideration in committee of the whole of answers to questions raised during committee of the whole debate: 28/5/1990, J.151.)

Any senator may move a request for an amendment. In that respect, a senator has a greater power in relation to financial legislation than a member of the House of Representatives, other than a minister. Under the procedures of that House, a private member cannot move an amendment involving the imposition of taxation or an increase in an appropriation in a bill (the latter kind of amendment requiring a message from the Governor-General).

A proposed request may be amended, just as a proposed amendment may be amended.

As with amendments made by the Senate, it is not normal for reasons for requests to be sent to the House of Representatives, although it would be open to the Senate to do so if it chose (ruling of President Baker, SD, 16/10/1903, p. 6243).

If the House of Representatives returns a bill with the Senate’s requested amendments made, the bill is proceeded with by the Senate. If the requests were made in committee of the whole, as is normal, a motion is then moved that the bill be read a third time. Further requests may be made at that stage, if necessary by a recommittal of the bill (28/6/1996, J.443).

If the House of Representatives returns a bill to which the Senate has requested amendments with the requested amendments not made or made with modifications, the bill is considered in committee of the whole, and any of the following motions may be moved:

(a) That the request be pressed.

(b) That the request be not pressed.

(c) That the modifications be agreed to.

(d) That the modifications be not agreed to.

(e) That another modification of the original request be made.

(f) That the request be not pressed, or agreed to as modified, subject to a request relating to another clause or item, which the committee orders to be reconsidered, being complied with. (SO 141(2)).

These procedures provide flexibility in any situation in which the House does not completely comply with the requests of the Senate. Any of the motions may be amended to alter the proposed course of action (11/6/1970, J.181; 21/12/1988, J.1366; 21/6/1991, J.1284; 24/3/1994, J.1504; for the substitution of amendments for requests, see the Health Legislation Amendment Bill (No. 2) 1999, 30/3/1999, J.664-5; Dairy Produce Legislation Amendment (Supplementary Assistance) Bill 2001, 28/6/2001, J.4512-4). The primary question to be determined is whether or not the Senate should insist on its requests as originally made.

There is no rule, as there is in relation to further amendments moved after disagreement by the House of Representatives with the Senate’s initial action, that further requests must be relevant to the matters in issue: section 53 of the Constitution allows new requests to be made at any stage, and this is reflected in standing order 140(1), which provides that a request may be made on consideration of any message from the House (see Youth Allowance Consolidation Bill 1999, 22/6/2000, J.2859-71).

If the motion that a request be not pressed is negatived by a majority, the committee has resolved to press the request accordingly (ruling of President Young, SD, 20/10/1981, p. 1412). Similarly, if a motion that a request be pressed is negatived by a majority, the committee has resolved not to press the request.

In 1993, in relation to the Customs Tariff (Deficit Reduction) Bill 1993 and the Excise Tariff (Deficit Reduction) Bill 1993, the question arose of the effect of the negativing of either of the first two questions by an equally divided vote. It was ruled that, in that circumstance, the request is disposed of and the bill proceeds without the request. The rationale of this ruling is that a request requires the support of a majority to be made in the first instance, and an equally divided vote on either of the questions indicates that there is no longer a majority in favour of proceeding with the request (ruling of President Sibraa, 21/10/1993, J.690-2; see also Procedure Committee, Second Report of 1994, 10/11/1994, PP 223/1994, pp 4-28; statements by Deputy President, 10/2/1997, J.1400-1; 24/6/1997, J.2192-3). If a request is disposed of in this way, the third reading of the bill could be negatived by an equally divided vote; in other words, a majority is required to pass the bill, and senators who unsuccessfully voted to insist on a request in that circumstance could vote to reject the bill as a consequence of the rejection of the Senate’s request. (See Supplement)

The application of the principle underlying this ruling may be complicated if the House of Representatives makes amendments to a bill in substitution for requested amendments not agreed to by the House. In that circumstance, normally a motion is moved that the Senate does not press its request, but agrees to the amendment made by the House of Representatives in place thereof. If this motion were to be negatived on an equally divided vote, this would mean that the Senate would not press its request but would also disagree with the amendment made by the House of Representatives in substitution; in other words the bill would go forward in its original form (it is clear that a motion to agree to a substitute amendment made by the House of Representatives must be carried by a majority). This could well be an unintended outcome.

The solution to this problem is that a senator could ask for the question to be divided under standing orders 84(3) and 144(2) and (7); such a request is always granted, unless the question is incapable of division. The question would then be put that the committee not press its request. If that question is negatived by a majority, the request is pressed and the second part of the question is redundant. If the question is negatived on an equally divided vote and the request is thereby lost, senators can then consider their vote on the question that the substitute amendment made by the House of Representatives be agreed to. Senators who unsuccessfully voted to press the request could then vote for the amendment suggested by the House of Representatives as a second-best choice. If that second question is also negatived the Senate would have rejected the amendment proposed by the House of Representatives in substitution for its own request. Senators would then have the option of voting against the third reading of the bill.

If a request is not pressed because of an equally divided vote, a similar vote could also prevent the final passage of the bill by negativing either of the questions for the resolution of the committee to be reported or the report of the committee to be adopted. The bill would then remain in the Senate and would not pass.

There is also the potential complication of substitute amendments or requests being proposed in the Senate on the return of the bills, which is permitted by standing order 141. That procedure, however, does not raise any similar difficulties of interpretation. Any such amendments or requests would require a majority to be carried, subject to what is said in Chapter 12, under Disagreement of House with Senate amendments, in relation to amendments for the omission of clauses or items.

In unusual proceedings on the Wool Tax (Nos 1-5) Amendment Bills 1991, the Senate at first resolved to further press certain requests, but subsequently the message of the House of Representatives was reconsidered in committee of the whole, by leave, this resolution was reversed and an amendment made to each bill by the House of Representatives in substitution for the requests was agreed to, after the government had given certain undertakings in relation to the bills. This action was possible only because a message informing the House of Representatives of the Senate’s resolution to press its requests had not been sent before the matter was further considered (21/6/1991, J.1284).

Although it is open to the Senate to negative the third reading of a bill in which the House of Representatives has made amendments at the request of the Senate, there is at least an implied understanding that, if the Senate suggests amendments and the House of Representatives makes the amendments, the bill as amended will be passed by the Senate (see ruling of President Baker, SD, 11/10/1906, p. 6449).

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