Chapter 13 - Financial legislation

History of expenditure scrutiny

The history of these procedures is of interest. Prior to 1961, the only opportunities for the Senate to consider the estimates were the debate on the budget papers, the second reading debate and the committee of the whole stage on the appropriation bills. This system was unsatisfactory because the appropriation bills were often received late in the period of sittings and insufficient time remained for their consideration. This led to the adoption of a new procedure in 1961.

From 1961 the practice was adopted of considering the estimates (that is, the figures contained in the appropriation bills, as distinct from the bills themselves) in committee of the whole prior to the receipt of the appropriation bills. This system had the advantage of allowing more time for the consideration of the estimates earlier in the period of sittings. The unsatisfactory features of this procedure were that the consideration of the estimates engaged the whole Senate for a considerable period of time, and questions could be put only to ministers in the Senate, who mostly repeated answers provided to them by departmental advisers. These disadvantages were partly the cause of the Senate moving to the consideration of estimates in estimates committees in 1970.

In 1970, as part of the establishment of a comprehensive committee system which had been recommended by the Standing Orders Committee, estimates committees were established to examine the estimates in detail (see also Chapter 16, Committees). The estimates committees were intended to achieve the advantage of more expeditious consideration of the estimates, in that three estimates committees could meet simultaneously. An additional advantage was that questions could be put directly to departmental officers, subject to the right of ministers to answer questions themselves. The committees were also established with the intention that largely they would replace the committee of the whole proceedings. An explanatory note circulated in June 1970 with the motion to establish the committees stated:

The reasonable expectation would be that, the Estimates having been examined by the Estimates Committees, the Senate would generally only consider any matters in respect of which further consideration had been recommended by the Committees.

The next major change in procedures was the adoption in December 1989 of a recommendation of the Select Committee on Legislation Procedures, which considered the estimates procedures in conjunction with its consideration of procedures for referring bills to committees (see also Chapter 12, Legislation, under Procedures for regular referral to committees). The select committee recommended that debate in committee of the whole on appropriation bills be confined to matters in respect of which estimates committee reports or reservations attached to the reports had made recommendations that the Senate further consider those matters.

The reason for this recommendation was that the committee of the whole stage on appropriation bills, which was intended to be largely replaced by estimates committee examination of the estimates, had in fact expanded into a full-scale reconsideration of the detail of the bills. As was pointed out by the then Deputy President, Senator David Hamer, in debate on the select committee report (SD, 4/12/1989, p. 3814), after the estimates committees were established in 1970 there was a large reduction in the time spent in committee of the whole on the appropriation bills, but that time had increased over the years until, in 1989, 33 hours were spent in committee of the whole on the bills. The recommendation of the select committee was intended to achieve the original purpose of the estimates committees of largely replacing the committee of the whole consideration of the bills, and focussing any debate in committee of the whole on matters which were raised in estimates committees and which were considered to require some further examination.

By the end of 1992, however, it was already clear that the adoption of the new procedures in December 1989 had not achieved its purpose. In 1990 nearly 20 hours were spent on the additional appropriation bills and over 37 hours on the annual appropriation bills in committee of the whole. In 1991 over 24 hours were spent in committee of the whole on the additional appropriation bills and 30 hours on the annual appropriation bills. There had not been a return to the original purpose of estimates committees of replacing committee of the whole consideration of the estimates. This was because a great many matters were recommended for further consideration by estimates committee reports or reservations attached to the reports. The 1989 procedures did not place any limitation on the number of matters which could be recommended for further consideration, and, as was pointed out by the Chair of Committees in relation to the annual estimates in 1990, many of the matters were very broad and did not relate to specific programs or items of expenditure (SD, 12 and 13/11/1990, pp 3893-7, 4036). In the 1991 reports and reservations, matters recommended for further consideration were more specific, but a great many matters were specified.

The fundamental difficulty with the various changes of procedures which had occurred over the years was that they provided more opportunities for the consideration of the estimates and the appropriation bills, and the consideration of the estimates and the bills had expanded to take up all of the available opportunities.

Originally there were only the second reading and committee of the whole stages of the appropriation bills in addition to debate on the budget papers. Thus there were three opportunities to consider the estimates, one of which was in committee. There were by 1992 four opportunities to consider the estimates, two of which allowed detailed consideration in committee:

(a) the debate on the budget papers (this debate is usually not extensive and is often not completed);

(b) consideration of the estimates in estimates committees;

(c) the second reading debate on the appropriation bills; and

(d) the committee of the whole stage of the appropriation bills.

The stages listed in (b), (c) and (d) had expanded into full-scale considerations of the estimates and the appropriation bills. The original intention of the establishment of the estimates committees, that they would largely replace the committee of the whole stage on the bills, had still not been realised. In effect, there were two opportunities to consider the estimates in committee, with each senator able to speak any number of times, when it was originally intended that there be only one such detailed consideration.

In 1992 the Procedure Committee considered ways of returning to the original purpose of estimates committees, and preventing the continuing expansion of consideration of the estimates so that it took up more and more of the time available for the consideration of legislation.

The Procedure Committee proposed that, as a substitute for the committee of the whole, supplementary hearings of estimates committees be held. (Procedure Committee, Discussion Paper, Estimates Committees and Appropriation Bills, December 1991; First Report of 1992, PP 527/1992, March 1992.)

This proposal was adopted by special orders agreed to on 6 May 1993 (J.99) and incorporated into standing order 26 in February 1997. The procedures required that, after the initial round of hearings of committees, written answers to questions and further information provided by departments were to be lodged with the committees in accordance with a deadline fixed by the committees. Senators were to lodge with the committees notice of specific matters which they wished to be further examined in the committees, and of matters arising from the written answers and the additional information which they wished to raise (these notices replaced the matters recommended for further consideration in committee of the whole in the estimates committee reports and the reservations attached to the reports under the 1989 procedures). The committees then met after the written answers and additional information had been provided, and held supplementary hearings on the matters notified by Senators for further examination. The responsible ministers were notified in advance of the particular matters to be raised at the hearings, and asked to provide the officers with responsibility for those matters. The hearings were to be held outside the Senate’s sitting times, but the sittings of the Senate could be suspended to allow the hearings to take place if the Senate’s program of business allowed. The committees decided the times of the hearings and how long they would last. The committees were to coordinate their supplementary meetings, just as their main meetings were coordinated.

Apart from avoiding long committee of the whole proceedings, and achieving the original purpose of the establishment of the estimates committees, these procedures had a number of advantages:

  • a more satisfactory and systematic means is provided of dealing with matters arising from the initial hearings of the committees
  • in particular, questions arising from written answers and additional information are put directly to officers
  • answers to questions on notice and additional information are supplied more expeditiously and perhaps are more carefully composed
  • officers do not need to attend on the committee of the whole stage, the progress of which is much more uncertain than that of the committees
  • there is less pressure on the committees to conclude their main meetings by a deadline.

In 1994, as part of a restructuring of the committee system recommended by the Procedure Committee (see Chapter 16, Committees), the function of scrutinising estimates was transferred to the legislative and general purpose standing committees. These committees examine the estimates in the same way as the estimates committees.

In 2001, on the recommendation of the Procedure Committee, supplementary hearings were confined to the annual appropriation bills, and abolished in respect of the additional appropriation bills. The rationale of this change was that, as the budget cycle had developed, the supplementary hearings for the additional appropriation bills were occurring very near to the main round of the annual appropriation hearings, when unlimited questioning of departments and agencies is possible.

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