Procedure for dealing with financial legislation
Except as described in this section, financial bills are proceeded with by the Senate in the same way as other bills.
Debate on first reading of a non-amendable bill
The motion for the first reading of bills which the Senate may not amend, unlike the equivalent stage of amendable bills, is debatable. 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.
In debate on the motion for the first reading, matters not relevant to the subject matter of the bill may also be discussed. 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.
When requests can be made
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:
- On the motion for the first reading of the bill.
- In committee after the second reading has been agreed to.
- On consideration of any message from the House of Representatives referring to the bill.
- On the third reading of the bill.
Standing order 140 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. 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. 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.
In practice, requests for amendments of non-amendable bills are now usually made during the committee of the whole stage.
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.
Requests to omit items/clauses etc
In committee of the whole on a bill which the Senate may not amend, the following procedures are followed:
- The Chair calls on each clause or item, and puts the question — That the clause or item be now passed without requests.
- 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.
- 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.
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. Whereas the omission of a clause or item in an amendable bill can occur as a result of an equally divided vote on the question that the clause or item stand as printed, requests must be agreed to by majority decision.
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. 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.
Under the current practice of taking bills as a whole in the committee stage, the question on a request to omit a clause or item is put in the form, that the request be agreed to. This preserves the principle that the making of a request to omit the item is the only option open to the committee, while maintaining the final option of rejecting the whole bill at the third reading if the House does not make the requested amendment. If the request is negatived, the question is not put on the individual clause or item which is dealt with under the final question in the committee stage, that the bill be agreed to subject to requests.
At the request of any senator a clause or item under consideration is divided.
Consideration of a clause or item may be postponed, as with an amendable bill.
Procedure after requests agreed to
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. 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.
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.
The Senate has dealt with requests suggested by the House of Representatives in substitution for Senate requests.
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. 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.
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.
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.
A list of occasions on which the Senate has made requests, showing the outcome of the requests, is contained in appendix 6.
Making requests and amendments to the same bill
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 and the bill has been read a third time, the bill is again returned with a message asking for concurrence of the House with the amendments. 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.
Pressing of requests
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:
- That the request be pressed.
- That the request be not pressed.
- That the modifications be agreed to.
- That the modifications be not agreed to.
- That another modification of the original request be made.
- 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.
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. 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.
If the motion that a request be not pressed is negatived by a majority, the committee has resolved to press the request accordingly. 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. 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. For an example of this, see customs and excise bills negatived at the third reading in 2009.
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.
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.
Senate’s right to press requests
In spite of the procedures of the Senate expressly providing for the pressing of requests, and the fact that the House of Representatives has dealt with and acceded to pressed requests, the right of the Senate to press requests has been questioned. Governments in the House of Representatives have not expressly conceded the Senate’s right to press requests, and when dealing with pressed requests have usually passed a resolution to the effect that the House refrains from determining its constitutional rights in relation to the question.
The essence of the argument that the Senate may not press a request is that there must be some difference between an amendment and a request, and that is the difference. This argument disappears if it is concluded, as has been suggested in this chapter, that the difference between an amendment and a request is procedural only. The Constitution prescribes a number of matters of procedure, and to say that the difference is one of procedure is not to deny its importance. The distinction between an amendment and a request, according to this view, is closely related to another matter of procedure prescribed by section 53 of the Constitution, the exclusive right of the House of Representatives to initiate bills for appropriating money or imposing taxation. The provision relating to requests preserves that initiative without affecting the substantive powers of the Senate.
The following considerations support this thesis, and the right of the Senate to press its requests for amendments.
- There is nothing to prevent the Senate pressing its requests. If the constitution-makers had intended that the Senate be prohibited from pressing a request they would have provided some mechanism for enforcing the prohibition. To the contrary, section 53 of the Constitution provides that the two Houses have equal powers except as provided in the section.
- Not only was such a prohibition on the Senate not adopted, it was explicitly rejected. At the Constitutional Convention of 1898 an amendment to insert the word “once” in the relevant paragraph of section 53, to prevent the Senate repeating a request, was defeated.
- Delegates to the Constitutional Conventions, including Edmund Barton, indicated that the difference between an amendment and a request would be one of procedure only, the rationale of the difference being to preserve the right of the House of Representatives actually to alter the text of a bill by amendments involving additional appropriations or taxation.
- The relevant paragraph of section 53 provides that the Senate may “at any stage” return a bill to the House of Representatives with requests. Even if “at any stage” is interpreted as meaning at any stage in the Senate’s initial consideration of the bill, as has been suggested as an argument against the pressing of requests, the Senate could press a request many times by reiterating it at each stage of the consideration of a bill, and could provide in its own procedures that non-amendable bills pass through 100 stages.
- Even if the Senate could not press the same request, it could easily circumvent such a restriction, for example, by slightly modifying a request on each occasion on which it was repeated. It cannot be supposed that the constitution-makers intended to impose a prohibition which could so easily be circumvented.
- The Senate has successfully pressed requests on many occasions since 1901.
A practical argument in support of the right to press requests is that it provides a means of allowing further consideration of a matter in dispute between the Houses before the matter reaches the stage of final disagreement, for example, by the rejection by the Senate of the bill, which can then be settled only by the provisions of section 57 of the Constitution.
On the basis of these considerations the right of the Senate to press requests has been supported by many eminent and learned authorities, including Senator Josiah Symon, Senator, later Mr Justice, R.E. O’Connor, and Mr W.M. Hughes, MP.
As has been expounded in this chapter, the provisions of section 53, because they refer to the internal proceedings of the two Houses on proposed laws, as distinct from enactments of the Parliament, are not justiciable, and depend for observation and compliance upon agreement being reached between the two Houses. Thus if the Senate were to pass a bill imposing taxation or an amendment directly increasing expenditure, the only remedy would be for the House of Representatives to decline to consider the bill or the amendment. Similarly, the Senate may decline to pass a bill until its amendments or requests are agreed to by the House. To say that the provisions of section 53 are not justiciable and rely for enforcement upon the dealings of each House with the other is another way of saying that those provisions are procedural only. A real limitation on legislative power requires a means of legal enforcement. In that respect, section 53 is to be contrasted with section 55, as has been indicated earlier in this chapter.
Section 53 being thus a procedural section, prescribing procedural rules for the Houses to observe, it is for the Houses, in their transactions with each other, to interpret those rules by application. It is suggested that, in their dealings with Senate requests over the years, the Houses have supplied the required interpretation so far as the pressing of requests is concerned, and that interpretation is that requests may be pressed.
Amendments changed to requests
Standing order 130 provides that 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. After such requests have been dealt with any Senate amendments not resolved may then be dealt with in accordance with procedures for amendments. 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.
Requirement for statements of reasons
Ongoing difficulties with the interpretation and application of section 53 of the Constitution were experienced throughout the 1980s and early 1990s, culminating in disputes over the 1993 deficit reduction bills. As a consequence, the Procedure Committee, in its first report of 1996, recommended a scheme for the interpretation and application of section 53. Essentially, the scheme would require bills which appropriate money, either directly or indirectly, to contain an appropriation clause and to be first introduced into the House of Representatives, and bills which increase taxation to be treated as bills imposing taxation, and would provide for certifications by the government as to whether particular amendments moved in the Senate would increase expenditure from an indefinite appropriation, with statements of reasons for such certification.
While this proposal has not yet been adopted by the Senate, a modified form of the proposal was adopted in 2000 when the Senate agreed to the following resolution:
The Senate requires that all amendments circulated in the Senate chamber in the form of requests be accompanied by a statement of reasons for their being framed as requests together with a statement by the Clerk of the Senate on whether the amendments would be regarded as requests under the precedents of the Senate.
The circumstances were that the Senate had made amendments to the New Business Tax System (Miscellaneous) Bill 1999 which the House of Representatives had not agreed to but had made identical amendments in their place, on the basis that the amendments should have been requests. An explanation subsequently emerged that the amendments would increase payments to be made out of a standing appropriation, a circumstance in which the Senate would normally have made requests. Lack of clarity led the Chairman of Committees to suggest that it would be appropriate for the Senate to take steps to ensure such explanations were received in advance of the Senate’s consideration of such amendments in future cases. This resolution followed a series of cases of government drafters presenting amendments as requests inappropriately and failing to respond to requests for explanations for so doing.
The requirement for statements of reasons has provided the Senate with information about whether (and how) particular amendments attract any of the provisions of section 53 and how such cases may have been dealt with in the past. It is thus an aid to consistency of interpretation. In practice, the statements of reasons are incorporated in Hansard after the requests to which they relate.
Decision as to amendments or requests
The Chair of Committees may decide in the first instance whether an amendment should take the form of a request, but ultimately it is for the Senate to decide whether to proceed by way of amendment or request.
For the assistance of senators, the Senate department classifies and marks bills as follows:
A—contains a provision appropriating money
AA—amends an act which contains a standing appropriation of money*
AA, Namends an act which contains a standing appropriation of money but does not appear to affect the appropriation
T—affects taxation but does not appear to impose a new tax or to increase an existing tax*
IT—appears to impose a new tax or to increase an existing tax*
N—does not attract any of these classifications*
*if more than one act is amended by the bill, the amendments to each act are classified in accordance with these marks.
Until late 1994 it was the practice of the Office of Parliamentary Counsel (the government drafters) to place marks on the bottom right hand corner of the first page of bills to indicate a view of their category. The marks were as follows:
MM—indicating a bill requiring a message from the Governor-General recommending an appropriation of loan moneys
MR—indicating a bill requiring a message from the Governor-General recommending an appropriation of revenue
MRM—indicating a bill requiring a message from the Governor-General recommending an appropriation of revenue and loan moneys
T—indicating a bill dealing with taxation, but not imposing tax
T*—indicating a bill imposing taxation
O—none of the above.
Where a bill required a message from the Governor-General recommending an appropriation and was also a bill with respect to taxation, the mark placed on the first page was a mark composed of the marks relevant to each aspect of the bill.
These classifications were not necessarily accepted by the Senate. Bills marked T* were not always regarded as imposing taxation, as often they merely amended statutes which imposed taxation without affecting the tax. Bills which clearly proposed fees for services were often marked T*.
During the controversy over the 1993 taxation bills, it was pointed out that the drafters’ classification of taxation bills often did not conform with the views then expounded by the Attorney-General’s Department. In late 1994 the Office of Parliamentary Counsel abandoned the practice of placing marks on bills.
Cases of government amendments wrongly circulated as requests are considered below in relation to the various categories of bills. Usually this arises because of inconsistent interpretations by government advisers of the constitutional provisions. Occasionally, however, even after the resolution of the Senate of 26 June 2000, government amendments which should be requests are mistakenly circulated as amendments.
Consideration of appropriation bills by estimates committees and in committee of the whole
The Senate has a system which allows intensive scrutiny of government expenditure proposals, or estimates, before the appropriation bills reflecting those proposals are received by the Senate.
The basis of this system is the scrutiny of estimates, from 1970 to 1994 by estimates committees and from 1994 by the legislative and general purpose standing committees. Schedules of the proposed expenditure contained in the main annual and additional appropriation bills are tabled in the Senate when the bills are introduced into the House of Representatives, and are referred to the committees for examination.
These committees provide the principal opportunity for senators to scrutinise, not only the expenditure proposals of the government, but the operations and activities of government departments and agencies. In effect, they have become twice-yearly general inquisitions into government operations. As such, they are regarded by senators as among the most valuable of the Senate’s activities.
The committees, for each group of annual and additional appropriation bills, hold a main round of hearings at which all items of expenditure are open to examination, and in relation to the annual appropriation bills a supplementary round of hearings, after answers to questions taken on notice are received, which are confined to matters senators have notified for further questioning.
The committees report after their main hearings, and draw attention to any matters for further consideration by the Senate. They do not necessarily make any further reports after the supplementary hearings unless they have specific recommendation to make, for example, a recommendation that a matter be referred to a standing committee for further inquiry.
Strictly speaking, the committees have before them only the estimates of expenditure reflected in the annual appropriation bills, and, as has been noted, these account for less than 15 percent of government expenditure. In practice, however, the whole range of government expenditure is examined by the committees, particularly at the time of the main appropriation bills.
It is considered that normally the appropriation bills should not be passed until the committees have concluded their hearings. The rationale for this is that the hearings may lead to senators wishing to move amendments or requests to the bills. The second reading debate on the bills may take place before the committees conclude their hearings. There is no fixed rule relating to this matter, and it has always been open to the Senate to pass the appropriation bills before the committees have concluded their deliberations.
Normally only the main annual and additional appropriation bills are referred to the committees but, on occasion, special appropriation bills have been referred. 
Further details on estimates hearings are in Chapter 16, Committees.
When proposed expenditure contained in an appropriation bill has been considered by a committee under these procedures, the bill is not considered in committee of the whole unless a senator has circulated in the Senate a proposed amendment or request for amendment to the bill. In that circumstance debate in committee is confined strictly to the purpose of the amendment.
The adoption of any recommendations of the committees may be proposed by way of an amendment to the motion for the passage of any other stage of a bill.
Supplementary hearings were devised as a means to constrain extensive debate on the appropriation bills in committee of the whole. 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.
This proposal was adopted by special orders agreed to on 6 May 1993 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, 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.