Odgers' Australian Senate Practice Thirteenth Edition

Chapter 13 - Financial legislation

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The interpretation of section 53 and related provisions

The constitutional innovation that became section 53 has been at the centre of disputes between the Senate and the executive (although technically the disagreement is between the two Houses) over the respective rights and powers of each. This section records the Senate’s interpretation of the various aspects of section 53 and related provisions. Readers are also referred to chapter 13 of the 12th edition of this work and chapter 16 of the 6th edition of Australian Senate Practice for more detailed accounts of historical material which is referred to in this edition.

Terminology

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.[63] 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. 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:

  1. 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
  2. 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.

Appropriation and taxation bills are described in the following sections.

Bills appropriating money

Appropriation bills fall into several categories:

  • annual appropriation bills, which appropriate money for the services of the government and the Parliament for the financial year[64]
  • additional appropriation bills, which appropriate additional funds for the services of the government and the Parliament for the financial year[65]
  • supply bills, which appropriate money for the services of the government and the Parliament for the period from the beginning of the financial year until the annual appropriation bills are passed, and which are subsumed by the annual appropriation bills[66]
  • special appropriation bills, appropriating money for special purposes, including bills which make continuing and indefinite appropriations (see below).

The annual appropriation bills and the supply bills for the services of the government always appear in pairs because the provisions which appropriate money for the ordinary annual services of the government, and which may not be amended by the Senate, must, under section 54 of the Constitution, be separated from those provisions which appropriate money for services of the government other than ordinary annual services. The funds appropriated by the supply and appropriation bills are therefore divided between two bills to separate the provisions which are amendable by the Senate from those which are not amendable by the Senate. The ordinary annual services appropriations are usually in Appropriation Bills Nos 1 and 3, and other appropriations in Appropriation Bills Nos 2 and 4. The distinction between ordinary annual services and other services is a matter for interpretation and was delineated by an agreement between the Senate and the government in 1965, as further outlined below.

The annual appropriation bill not for the ordinary annual services of the government has been amended on numerous occasions.[67]

In 1999 the Senate amended two appropriation bills for special purposes to strike out provisions which allowed grants to be made to bodies and persons without terms and conditions. The Senate took the view that the specification of terms and conditions for grants is an essential element of audit control of expenditure.[68]

Provisions in bills which were described by the government as “switching off” and “switching on” appropriations were the subject of a statement by the Chair of Committees on 14 September 2005. They appeared to be a device to avoid the injunction in section 53 of the Constitution on the initiation of appropriations in the Senate, and did not appear to derogate from the processes of the Senate.[69]

Until 2005 it was thought that the expenditure of money under appropriations was as a matter of law limited to the purposes of the appropriations. In Combet v Commonwealth (2005) 224 CLR 494, however, a majority of the High Court, called upon to consider the legality of certain government advertising expenditure under the post-1999 outcome-based budgeting system reflected in appropriation bills, in effect held, as the minority justices observed, that the executive government is free to expend money from appropriations on any purpose it deems appropriate. This judgment, as the Chief Justice explicitly stated, placed the task of controlling expenditure under appropriations exclusively in the responsibility of the Parliament.[70] The purposes for which appropriations may be made, however, may yet be limited by the Constitution.[71]

Bills appropriating money for the ordinary annual services of the government

Section 53 of the Constitution provides that the Senate may not amend a bill which would appropriate money for the ordinary annual services of the government.

A bill would appropriate money if it contains a provision expressly stating that money is appropriated for the purposes of the bill. It is therefore readily determined whether a bill is an appropriation bill. The question which arises for interpretation is: what kind of appropriation is an appropriation for the ordinary annual services of the government?

This expression is used only in sections 53 and 54, and not in section 55. It is therefore not justiciable and its interpretation is a matter for the two Houses in their dealings with each other.

Meaning of ordinary annual services of the government

The framers of the Constitution had a fairly clear conception of the meaning of the phrase “the ordinary annual services of the government”, and it was expounded by a number of speakers at the Constitutional Conventions. The expression referred to the annual appropriations which were necessary for the continuing expenses of government, as distinct from major projects not part of the continuing and settled operations of government. The expression had been taken from the so-called Compact of 1857 between the government and the Legislative Council of South Australia, and the operation of that agreement was familiar to the framers of the Constitution. The interpretation of the provision was also explored in a number of debates in the Senate.[72]

The interpretation of the expression was substantially settled in 1965 by what amounted to an agreement between the Senate and the government, and by agreed applications of the terms of that agreement since that time.

This agreement, which is generally referred to as the Compact of 1965, arose from an attempt by the government to place in the non-amendable annual appropriation bills provision for some matters which were traditionally regarded as not forming part of the ordinary annual services. After debate in the Senate and the consideration of the matter by an informal committee of senators, a statement was made on behalf of the government indicating that appropriations for the following matters would not be regarded as part of the ordinary annual services of the government and would therefore be included in the amendable bill:

  1. the construction of public works and buildings;
  2. the acquisition of sites and buildings;
  3. items of plant and equipment which are clearly definable as capital expenditure;
  4. grants to the States under section 96 of the Constitution; and
  5. new policies not authorised by special legislation, subsequent appropriations for such items to be included in the appropriation bill not subject to amendment by the Senate.

This list reflected the principles set out in the report of the informal committee of senators.[73]

In 1974 two estimates committees drew attention to appropriations for new policies included in the non-amendable appropriation bill, and the Standing Committee on Constitutional and Legal Affairs was given a reference to consider the inclusion of new policies not authorised by legislation in the non-amendable bill. The committee’s report indicated that appropriations for new policies not authorised by legislation should not be included in the non-amendable bill, and recommended that the Senate reaffirm the principles of the Compact of 1965.[74] The Senate therefore passed the following resolution:

That the Senate resolves:

  1. To reaffirm its constitutional right to amend proposed laws appropriating revenue or moneys for expenditure on all matters not involving the ordinary annual services of the Government.
  2. That appropriations for expenditure on:
  1. the construction of public works and buildings;
  2. the acquisition of sites and buildings;
  3. items of plant and equipment which are clearly definable as capital expenditure;
  4. grants to the States under section 96 of the Constitution; and
  5. new policies not previously authorised by special legislation,

are not appropriations for the ordinary annual services of the Government and that proposed laws for the appropriation of revenue or moneys for expenditure on the said matters shall be presented to the Senate in a separate Appropriation Bill subject to amendment by the Senate.[75]

The ordinary annual services are therefore defined by what they do not include rather than what they include.

The application of the Compact of 1965 was the subject of correspondence between the Standing Committee on Appropriations and Staffing and the government, tabled in the Senate on 3 November 1988 and 4 April 1989. It was agreed that expenditure on computers, which, due to changes in technology, are no longer major items of capital equipment, and expenditure on the fitting out of buildings, should be regarded as part of the ordinary annual services subject to certain limits.

In 1999 the Senate adopted a recommendation in the 30th report of the Appropriations and Staffing Committee that some adjustments be made in the classification of appropriation items for the purpose of determining whether they fall within the category of ordinary annual services in the context of accrual budgeting.[76] The adjustments provided that:

  1. items regarded as equity injections and loans be regarded as not part of ordinary annual services
  2. all appropriation items for continuing activities for which appropriations have been made in the past be regarded as part of ordinary annual services
  3. all appropriations for existing asset replacement be regarded as provision for depreciation and part of ordinary annual services.

In 2004 the Senate determined a matter relating to the classification of payments to international organisations, on the recommendation of the Appropriations and Staffing Committee.[77]

In March 2005 two appropriation bills were presented to replenish money spent by departments and agencies on relief for the victims of the 2004 tsunami. One of the bills purported to be for the ordinary annual services, but as the expenditure could not possibly be ordinary annual services expenditure, both bills were treated as amendable bills.[78] The Northern Territory Emergency Response package of bills repeated this anomaly,[79] as did bills to cover expenditure on an equine influenza outbreak.[80]

These instances indicated that the Department of Finance and Administration appeared to be taking a position that ordinary annual services include anything it regarded as falling within vaguely-expressed outcomes of departments, including new policy proposals, a position quite contrary to the compact of 1965 and subsequent Senate determinations.[81]

An amendment passed on 20 March 2008 to the motion for the second reading of the 2007-08 additional appropriation bills drew attention to the reports of the Senate committees on this issue, and called upon the government to resolve it.[82]

A similar amendment was passed to the additional appropriation bills in 2009.[83] In a 2009 response to the 2007 report of the Finance and Public Administration Committee on the transparency and accountability of Commonwealth public funding and expenditure, the government “noted” the committee’s recommendation that the matter of ordinary annual services be resolved.[84] A resolution passed on 16 September 2009 required the Minister for Finance and Deregulation to respond to the reports of the Appropriations and Staffing Committee and the Finance and Public Administration Committee by 16 November 2009.[85] In its 50th report, the Appropriations and Staffing Committee reported that the minister had responded as ordered, indicating that the government saw no need to change its position.[86] The committee recommended that the Senate reassert its position in a consolidated resolution which was agreed to on 22 June 2010 in the following terms:

That, in accordance with the recommendation made in the 50th Report of the Appropriations and Staffing Committee, the Senate resolves:

  1. To reaffirm its constitutional right to amend proposed laws appropriating revenue or moneys for expenditure on all matters not involving the ordinary annual services of the Government.
  2. That appropriations for expenditure on:
  1. the construction of public works and buildings;
  2. the acquisition of sites and buildings;
  3. items of plant and equipment which are clearly definable as capital expenditure (but not including the acquisition of computers or the fitting out of buildings);
  4. grants to the states under section 96 of the Constitution;
  5. new policies not previously authorised by special legislation;
  6. items regarded as equity injections and loans; and
  7. existing asset replacement (which is to be regarded as depreciation),

are not appropriations for the ordinary annual services of the Government and that proposed laws for the appropriation of revenue or moneys for expenditure on the said matters shall be presented to the Senate in a separate appropriation bill subject to amendment by the Senate.

  1. That, in respect of payments to international organisations:
  1. the initial payment in effect represents a new policy decision and therefore should be in Appropriation Bill (No. 2); and
  2. subsequent payments represent a continuing government activity of supporting the international organisation and therefore represent an ordinary annual service and should be in Appropriation Bill (No. 1).
  1. That all appropriation items for continuing activities for which appropriations have been made in the past be regarded as part of ordinary annual services.[87]

While the then finance minister indicated that the government saw no reason to change its position, agreements made between the minority government and independent and minor party members following the 2010 election noted the Senate’s resolution and included commitments from all parties to work towards implementing it.[88] Correspondence from a subsequent finance minister referred to the agreement and to efforts being made to implement it.[89]

In the meantime, the Appropriations and Staffing Committee, in its 50th report, recommended that the President continue to draw to the attention of the finance minister any items of expenditure which appear to be inappropriately included in the appropriation bill for the ordinary annual services of the government. This information is also drawn to the attention of legislation committees considering estimates.

Taxation bills

Taxation bills fall into several categories:

  • bills imposing taxation
  • bills which do not impose taxation, but which deal with taxation
  • customs tariff bills, which impose customs duties
  • excise tariff bills, which impose excise duties
  • other taxation measures.
Bills imposing taxation

Bills which impose taxation must be separate from bills which otherwise deal with taxation, and bills imposing taxation must deal with only one subject of taxation, except for customs tariff and excise tariff bills. These requirements are contained in section 55 of the Constitution.

A bill for imposing taxation may not be amended by the Senate, and any amendments to such a bill moved in the Senate must take the form of requests to the House of Representatives to amend the bill.

If a bill does not impose taxation, the Senate may amend it, and if a bill does impose taxation the Senate may seek amendments to it by way of requests. The difference between amendments and requests is a difference of procedure only, and does not in practical terms inhibit the Senate, as the Leader of the Government in the Senate, Senator Gareth Evans, pointed out in debate in the Senate.[90] As was also pointed out in discussion in the Senate, however, the combination of various measures in one bill, regardless of whether any of those measures impose taxation, restricts the options of the Senate in dealing with the various measures. If the measures were contained in separate bills, the Senate could reject some measures, amend some measures and agree to some measures without amendment. Those to which the Senate agreed without amendment would proceed at once to assent, and only those which the Senate rejected or amended could be the subject of further dealings between the two Houses.

With the combination of the measures in one bill, the Senate can seek changes to the various measures only by way of amending the bill, including by leaving out provisions of the bill, or by dividing the bill. The procedure of dividing the bill has no practical advantage over amendment, because the concurrence of the House of Representatives to the division of the bill is required before any of the measures can proceed to assent. By declining to agree to the division of the bill, the government in the House of Representatives can insist on the various measures being dealt with as a whole, and none of them can pass until agreement is reached between the two Houses on all of them.[91]

The combination of various taxation measures in one bill therefore limits the Senate’s scope for consideration of those measures, and section 55 is designed to avoid so limiting the Senate.

Under the second paragraph of section 55 of the Constitution, bills imposing customs or excise tariffs, unlike other bills imposing taxation, may cover more than one subject of taxation. A bill which increases any tariffs is regarded as a bill imposing taxation, even though it reduces or removes other tariffs.[92]

Bills dealing with taxation

In order to meet the requirements of section 55 of the Constitution, bills establishing schemes of taxation have been divided into bills imposing taxation and dealing only with the imposition of taxation and bills dealing with other matters associated with the taxation scheme such as provisions for the collection of the taxation and the enforcement of payment.

Until 1993, the principle was generally followed in the presentation of legislation, and accepted by both Houses, that only the bill which contained the expression “tax is imposed” was a bill imposing taxation within the meaning of sections 53 and 55, and any other bills dealing with other aspects of taxation were not bills imposing taxation within the meaning of those sections.

The form of the government’s major taxation legislation arising from the 1993 budget, however, led to claims that it breached section 55 of the Constitution, and to a reconsideration of the application of section 55, and consequently of section 53.[93]

Retrospectivity of tax legislation

In relation to certain taxes, the Senate in 1988 passed a declaratory resolution, as part of an amendment to the motion for the second reading of a bill, to the effect that if more than six months elapses between a government announcement of a taxation proposal and the introduction or publication of a bill, the Senate will amend the bill to reduce the period of retrospectivity to the time since the introduction or publication of the bill.[94]

The Scrutiny of Bills Committee draws the attention of the Senate to retrospective legislation, particularly tax legislation, and has been critical of the practice of backdating tax legislation to the date of a ministerial announcement.[95]

An amendment made by the Senate to the Taxation Laws Amendment (Budget Measures) Bill 1995 required public notification of any intention of the government to introduce changes to the sales tax law then in effect.[96]

tariff proposals

The Customs Act 1901 and the Excise Act 1901 contain provisions which allow the collection of customs duties and excise duties from the time of the announcement of proposals by the government, within a period of 12 months before the passage of legislation to validate the duties.[97] The purpose of these provisions is to ensure that windfall profits may not be made between the time of announcement of duties and the enactment of legislation to levy the duties.

The Senate has not declined to pass a bill validating increases in duties, and there has long been speculation about the remedial action which might be taken in such a case. In June 2000 the Senate passed a resolution expressing opposition to rates of excise contained in an excise tariff proposal tabled in the House of Representatives.[98] A compromise by the government avoided rejection by the Senate of the measure.

On 12 August 2003 the Senate deferred consideration of two customs and excise tariff bills to give effect to an ethanol subsidy scheme until the government produced documents required by various Senate orders relating to the scheme. The documents were not initially produced and the bills were not passed until documents were subsequently tabled.[99]

On 17 June 2008 the Senate passed a resolution declaring its opposition to excise increases on certain alcoholic beverages in the absence of a more comprehensive plan to deal with alcohol abuse, foreshadowing a possible rejection of excise increases already being collected.[100] These bills were eventually rejected, after the taxes had been collected for almost a year.[101] Bills to validate the collection of the taxes during their first year were subsequently passed, but the government continued to collect the taxes thereafter.[102]

Other “money bills” or measures

loan bills

When the expenditure and revenue-raising proposals of the government announced in the budget result in a deficit of revenue, it is normal for the Parliament to pass a Loan Bill authorising the government to borrow money to the extent of the deficit. Parliament thus has the opportunity annually to determine whether the government should be authorised to borrow. As these bills do not appropriate money or impose taxation, they are amendable by the Senate.

In 1985 and 1986 Loans Bills were presented to the Senate in a form which would have made permanent the statutory authority for the government to borrow money, and the bill for 1987 would have extended the authority to borrow into the supply period of the following financial year. In each case the Senate amended the bill to restrict the authority to borrow to the current financial year, thereby preserving for the time being the right of the Parliament to consider annually the government’s authority to borrow.

In 2009, as part of its legislation to deal with the global financial crisis, the government presented, and the Senate passed, an amendment of the Commonwealth Inscribed Stock Act 1911 giving the government a permanent authority to borrow money by issuing bonds. The Senate, however, amended legislation providing a Commonwealth guarantee of state and territory borrowings to require that a register of all government borrowings be established.[103]

The safeguards in sections 54 and 55 of the Constitution do not place any restrictions on loan bills or on the contents of bills appropriating money other than for the ordinary annual services of the government. In a highly unusual move, amendments to the Commonwealth Inscribed Stock Act 1911 to permit substantial increases in the Commonwealth’s borrowing limits were included in Appropriation Bill (No. 2) 2011-2012, thereby merging the question of borrowing limits with the problematic question of “supply”. Any attempt by the Senate to amend or disentangle the measures was thereby vulnerable to being characterised as an attempt to “block supply”. The bill passed without amendment.

advances to the Finance Minister

The annual appropriation bills include sums for advances to government (called Advances to the Finance Minister) to provide for payments in advance of appropriations, and for urgent and unforeseen expenditure. Similar advances are provided in the parliamentary appropriation bills for the President of the Senate and the Speaker of the House of Representatives for parliamentary expenditure.

Money advanced in this way was recovered by later appropriations for the purpose that were made during the financial year. For example, issues from the advance early in the financial year were recovered in the additional appropriation bills while amounts advanced after the additional or supplementary additional appropriation bills were recorded as a final charge on the advance.

Concerns at the potential abuse of the advance resulted in an inquiry by the Senate Standing Committee on Finance and Government Operations which reported in 1979.[104] As a consequence, the requirement in the appropriation acts for particulars of expenditure from the advance to be tabled in each House was complemented by an agreement to table statements of issues from the advance which were thus available for scrutiny, including by estimates committees to which the issues from the advance as a final charge were also referred.

The current mechanism involves a determination by the Finance Minister of an amount to be issued from the advance if the legislative criteria in the annual appropriation acts are satisfied. These criteria require the Finance Minister to be satisfied that there is an urgent need for expenditure that has not been provided for, or is insufficiently provided for, either because of erroneous omission or understatement, or that the expenditure was unforeseen. A determination by the Finance Minister has effect as if the schedule to the relevant appropriation act were amended in accordance with the determination, which is a legislative instrument under the Legislative Instruments Act 2003.

Following recommendations made by Senator Murray in his 2008 Review of Operation Sunlight, the government agreed to provide a more comprehensive report to the Parliament on the use of the advance. The report covers all amounts issued, not only those remaining as a final charge. It is subject to review by the Australian National Audit Office and, like its predecessor covering the amounts issued as a final charge, is referred to legislation committees considering estimates. The report is also considered in committee of the whole on a motion that the statements of expenditure be approved. This does not have the effect of authorising the expenditure, which is authorised by the original appropriation. Rejection of such a motion would signify dissatisfaction with a statement as an accountability document.

fees for licences or services

As noted above, under section 53 of the Constitution, section 53 makes a distinction between bills appropriating money and those which impose fines or other pecuniary penalties or fees for licences or services. Such bills may originate in the Senate and may be amended by the Senate. In recent times, however, High Court decisions on the scope of the taxation power have led to some such bills being drafted – and treated by the Senate – as bills imposing taxation.

standing or special appropriations

The Parliament has agreed to many bills which contain standing appropriations, usually called special appropriations, that is, appropriations which, when they have been put onto the statute book, continue to authorise the expenditure of money for some years or until they are repealed, and do not have to be renewed by Parliament. Bills to amend those acts are then introduced, and the provisions of the amending bills affect the amount of expenditure to be made under the standing appropriations. It is then necessary to determine whether any particular amendment by the Senate of the amending bills will increase the expenditure under the appropriation. This determination is further complicated because these standing appropriations are often also appropriations of indefinite amount.

The Parliament has also passed many bills which contain appropriations of indefinite quantity. The provisions in question usually state that the money required for the operation of the legislation is appropriated from the Consolidated Revenue Fund, without any specification of an amount. This drafting device is adopted because it is often not possible for the government to calculate with any degree of accuracy the amount of expenditure which will be required by the legislation concerned, because of uncertainty as to the impact of the legislation. This uncertainty also has the effect of making it difficult to determine whether any particular amendment of the legislation will require increased expenditure. If the government cannot determine how much expenditure will be involved in a piece of legislation, it is asking a great deal that the Senate should determine with certainty whether any particular amendment of the legislation will increase the expenditure.[105]

Appropriations of these kinds have been used (or abused) to such an extent in recent times that only about 15 percent of total government expenditure is now subject to annual parliamentary scrutiny and approval in the annual appropriation bills. The remaining 85 percent of government expenditure has escaped from parliamentary control through the use of these types of provisions. The following figures, extracted from the annual budget documents, show the growth of standing appropriations as a percentage of total government expenditure:

1909-10 10%
1929-30 38%
1949-50 49%
1969-70 56%
1992-93 74%
2002-03 80%
2011-12 85%

Had the Parliament not fallen into the habit of passing these kinds of provisions (and, it is submitted, it is a very bad habit from the standpoint of parliamentary control and supervision of expenditure), the interpretation of the relevant provision of section 53 would be relatively straightforward. It is because of these kinds of provisions that difficulties of interpretation have arisen.

Proper parliamentary supervision and control of expenditure, and the proper application of section 53 of the Constitution, require that all government expenditure be approved annually in specified amounts by Parliament, with additional and supplementary appropriations when required, and that expenditure of appropriated funds be governed by objective conditions rather than discretions vested in officials. There is no reason for this situation not being achieved, except an executive desire to avoid unwelcome parliamentary attention.[106]

A report of the Auditor-General presented in 2004 found widespread illegalities, lack of information and absence of accountability and control in the administration of special appropriations.[107] It was pointed out that the nature of special appropriations (“bottomless buckets of money”) encourages these problems.[108] The problems posed by special appropriations were subsequently taken up in debate on bills containing new provisions for such appropriations and by the Scrutiny of Bills Committee.[109] The committee adopted the practice of reporting on provisions for such appropriations.

Other reports by the Auditor-General disclosed lack of proper control and accountability in other areas of the public finance system where annual appropriations are by-passed.[110]

The Finance and Public Administration Committee presented a report in March 2007 on the appropriations and funding system and its effect on parliamentary accountability. The committee recommended significant changes not only to the system of appropriations but to other features of public finance introduced during the previous ten years which maximised flexibility for government but reduced transparency and accountability and hampered parliamentary scrutiny.[111]

It is no answer that other countries have extensively used standing appropriations. This means only that other countries have made the same mistake. Generally speaking they have not made the same mistake to the same extent. In the United Kingdom standing appropriations account for only 25 percent of government expenditure.

Initiation of bills with financial implications

It is clear from section 53 of the Constitution that a bill appropriating money may not originate in the Senate. The proliferation of standing or special appropriations has caused difficulties for the interpretation and application of the financial provisions of the Constitution and has made a major contribution to differences of interpretation between the Houses and some inconsistencies. For the House of Representatives, the production of a message from the Governor-General under section 56 is taken as an indication that an expenditure of money is required and thus an appropriation is involved. Messages are produced even where the expenditure is already authorised by a standing appropriation. Changes to an existing appropriation are therefore regarded as a new appropriation requiring a Governor-General’s message. A problem with this approach is that practices have not been consistent and messages have been produced where they were clearly not required, in one case at least from an “abundance of caution”.[112] The production of a message is thus not an infallible guide to whether a measure with financial implications attracts the provisions of section 53. As messages are not produced in the Senate (see above under Governor-General’s messages: section 56) it is not a factor that the Senate has generally had regard to in its consideration of the provisions of section 53.

As noted above, the Senate regards an appropriation bill as a bill which contains an appropriation clause. This is a simple and principled test.

The restriction on the Senate’s ability to initiate a bill appropriating money is not a restriction on the initiation of bills which may have major financial implications. There are numerous examples of such bills being introduced in the Senate, with the necessary appropriation being otherwise provided for.[113] Senate bills, particularly those introduced by private senators, commonly include a provision to indicate that any appropriation required is to be provided for elsewhere, to clarify that the bills do not infringe section 53 and that it remains the prerogative of the government in the lower house to initiate the necessary appropriation.[114]

On occasions the Senate has made requests for the insertion of appropriation provisions in bills originating in the House.[115] The better view, however, is that such amendments may not be moved in the Senate at all, in that, by turning a bill into an appropriation bill, they are contrary to the initiation provision of the first paragraph of section 53 of the Constitution.[116] This is based on the principle that the Senate may not achieve through amendment what it is prevented from doing by way of initiation.

On 12 November 2008 the government circulated in the Senate government amendments to be moved to a bill, including an amendment to insert a standing appropriation into the bill. When it was pointed out by Senate officers that moving such an amendment would involve initiating an appropriation in the Senate, the amendment was withdrawn from circulation.[117]

Where a statute contains a standing and indefinite appropriation of money for the purposes of the statute, for example, to pay for entitlements conferred on recipients of benefits, a bill which alters the terms of the statute may lead to increased expenditure from the appropriation, but is clearly not an appropriation bill as such; if such a bill were to be so misclassified as an appropriation bill, there would be no principled way of distinguishing it from many other bills which lead to increased expenditure but do not appropriate the money. In spite of this, the government in 2008, wishing to resist a private senator’s bill passed by the Senate, claimed that it was “unconstitutional” in extending pension entitlements, and suppressed debate on both this claim and the bill itself in the House of Representatives.[118] The same objections were raised in 2010 in relation to the Social Security Amendment (Income Support for Regional Students) Bill but on this occasion, as a consequence of the government’s minority status in the House of Representatives, a wide-ranging debate occurred before the bill was suppressed.[119]

In 2011, during consideration of a further private senator’s bill amending an act containing a standing appropriation, an amendment was moved to exclude the measures proposed in the bill from funding under the standing appropriation and to provide for them to be funded under a separate appropriation. Both the amendment and the bill itself were negatived on an equally divided vote.[120] Although this mechanism had the effect of preserving the financial initiative of the executive in the House of Representatives, it could not require that a government would subsequently bring forward the necessary appropriation bill. In any case, an appropriation in itself is not a commitment to spend money. It is an authorisation for money to be spent but does not impose an obligation on the executive to spend it.[121]

When are requests required?

Where the Senate may not amend a bill, it may instead request the House of Representatives to make the amendment. The main circumstances in which requests are required under section 53 are as follows:

  • for any amendment to a bill appropriating money for the ordinary annual services of the government
  • for any amendment to a bill imposing taxation
  • in relation to other bills, for any amendment that would have the effect of increasing a “proposed charge or burden on the people”.

As noted above (under Section 53 of the Constitution), the view is taken that the provisions of section 53 do not prevent requests being made in other circumstances. One example is in relation to amendments that are consequential on requested amendments. Where amendments are purely consequential on amendments which are properly framed as requests, the consequential amendments may also be framed as requests.[122] On occasions government drafters have attempted to have groups of government amendments all treated as requests on the basis that some of them should be requests and they are related. The Senate has not accepted this distorted application of the constitutional provisions.[123]

(a) bills appropriating money for the ordinary annual services of the government

Of the three constitutionally specified situations where requests are required, this first category has raised relatively fewer issues of interpretation than the other two, notwithstanding the significance of those issues. Once the Senate is satisfied that a bill appropriates money for the ordinary annual services of the government, then all amendments to the bill must take the form of requests.

On occasion, however, the threshold question of what constitutes a bill appropriating money for the ordinary annual services of the government has received attention and bills that were presented as such (as indicated by their long titles) have been treated as amendable bills on the basis that the expenditure to be authorised was neither ordinary nor annual.[124]

For precedents for requests for amendments in relation to bills appropriating money for the ordinary annual services of the government, see Appendix 6.

(b) bills imposing taxation

All amendments to bills imposing taxation must take the form of requests. The question of what is a bill imposing taxation has raised numerous questions of interpretation. Some of these questions are illustrated by the cases of the 1981 sales tax bills and the 1993 deficit reduction bills.

Section 55 requires that laws imposing taxation deal only with the imposition of taxation and only with one subject of taxation. Over many years government drafters, taking clues from expressions used in judgments of the High Court under section 55, had drawn a distinction between bills imposing taxation, bills dealing with the imposition of taxation (for example, setting taxation rates) and bills dealing with taxation generally (for example, providing for assessment and collection machinery). Only the bills actually imposing taxation had been regarded as subject to the restrictions of section 55. This meant that there were some bills which, by affecting assessment and rates of taxation, had the effect of increasing the incidence of taxation, but which were regarded as technically not imposing taxation, although the government drafters had not been consistent in their classification of such bills. This had also meant that bills technically not imposing taxation could be amended in the Senate by way of direct amendment, rather than requests to the House of Representatives for amendment, under section 53 of the Constitution. The sales tax legislation, for example, had always consisted of acts which imposed the sales tax and acts which, in effect, set the rates of tax for various categories of goods, and bills amending the latter had been treated as amendable in the Senate.

The separation of bills imposing taxation and bills setting rates of taxation had been accepted in the past, and had been supported, in effect, in the Senate, because it allowed the Senate to make amendments instead of requests for amendments. This past acceptance, indeed support, by the Senate of the practice of separating the bill imposing the tax and the bill, in effect, setting the rates of tax, when the practice reinforced the ability of the Senate to make amendments to taxation proposals, is best illustrated by the case of the Sales Tax Bills 1981.[125] Senators disputed the inclusion in those bills of provisions traditionally included in the amendable bills. The Senate, before dealing with the bills in committee of the whole, passed a resolution declaring that its decision to make requests for amendments to the bills did not indicate an acceptance that matter included in the bills was properly included in bills imposing taxation.[126]

The Taxation (Deficit Reduction) Bill 1993, however, drew attention to a significant consequence of this technical classification of bills: provisions which affected the levels of various taxes could be combined into one bill without breaching section 55, if the views of the government drafters were correct. The bill increased the rates of several taxes by this means, but it was classified by the government drafters as a bill which technically did not impose taxation.

The bill had the virtue of providing a reductio ad absurdum of the established classification of taxation bills, and an opportunity of considering that classification properly. As exemplified by the bill it could be seen to be based on an artificial distinction which, if carried to its logical conclusions, undermines a rational interpretation of the constitutional provisions. If accepted as it was manifested in this bill, it meant that bills which propose to increase significantly the levels of taxes may technically not be bills imposing taxation, may be introduced in the Senate, may be amended by the Senate (but presumably not to increase rates of taxation: a subsidiary absurdity, see below), and, most significantly, may be combined into one bill.

It was clear that if a bill such as this were to be enacted and were challenged in the High Court, it is possible that the Court would reject the technical and seemingly paradoxical classification of bills relied upon by the government drafters, and find that bills of this sort are bills imposing taxation and therefore subject to the limits of section 55. This the Court could do without setting aside, but by developing, its previous relevant judgments, and by having regard to the plain words and stated purposes of sections 53 and 55.

Because of the political significance of the changes contained in this bill, it was immediately questioned. The Leader of the Opposition in the Senate, Senator Hill, tabled two legal opinions to the effect that the bill would impose taxation and would violate section 55 if enacted.[127] The Leader of the Government in the Senate, Senator Evans, then tabled an Attorney-General’s Department opinion, in anticipation of an order for the production of documents of which Senator Hill had given notice, which expounded the government’s advisers’ views on the classification of taxation measures.[128] Senator Hill later tabled a supplementary opinion criticising the government opinion.[129] Questions relating to sections 53 and 55 of the Constitution and the bill were referred to the Legal and Constitutional Affairs Committee on the motion of Senator Hill.[130] The committee found that there was a substantial risk that the bill would be held to be invalid under section 55. To the motion to take note of the report an amendment was passed, calling upon the government to heed the conclusions of the report.[131] The government had already announced that it would divide the bill into a number of separate bills to avoid the possibility of the legislation being held to be invalid.

The new bills were rushed through the House of Representatives and received by the Senate. They consisted of a bill making the assessment-type changes to taxation, a “test bill” designed to provoke a legal challenge to determine the question of whether an alteration in rates of taxation is an imposition of taxation (this bill dealt with increases in the rates of fringe benefits tax and tax on friendly societies), a bill making the changes to income tax rates, and five separate bills making the changes to sales tax. The first two bills were referred to the Legal and Constitutional Affairs Committee.[132] The majority of the committee subsequently reported that the first bill would be valid and both bills should be passed, but the non-government senators doubted the validity of the first bill as well as the “test bill”.

When the Senate dealt with the bills, declaratory resolutions were passed,[133] similar to a resolution passed in 1981 when the Senate dealt with the 1981 sales tax legislation (see above). The resolutions in substance declared that the Senate, by proceeding with the bills as either amendable or non-amendable, was not committed to any view of whether they would be held to be bills imposing taxation. Requests for amendments were then made to some of the bills which the government claimed did not impose taxation.[134]

Similarly, requests were made to the sales tax bills arising from the 1995 budget to remove certain sales tax increases, and the requests were agreed to by the government in the House of Representatives, although the government claimed (in the explanatory memorandum accompanying the bills) that they were not bills imposing taxation.[135] To avoid a repetition of the 1993 dispute, the government divided the tax increases between three separate bills. Government amendments moved to certain bills which increased taxation were the subject of a statement by the Chair of Committees.[136]

The issues arising from these events were not resolved; in particular, the “test bill” was not challenged and the High Court was therefore not given the opportunity of resolving the disputed questions of interpretation.

The Senate, in its subsequent decisions about whether to proceed by way of amendments or requests for amendments in relation to bills dealing with taxation, has not accepted the interpretation of the government’s advisers. Bills stated by the government not to be bills imposing taxation have been treated by the Senate as bills imposing taxation and Senate amendments put in the form of requests accordingly.[137]

Bills have been treated as bills imposing taxation, and therefore subject to requests, in the following circumstances:

  • if a bill imposes taxation where it was not previously levied, such as on the salary of the Governor-General (notwithstanding that the bill contained other provisions not dealing with the imposition of taxation, contrary to section 55) [138]
  • if a bill broadens the tax base by imposing taxation where none was imposed before[139]
  • if a bill increases the rate of taxation[140]
  • if a bill is stated to “close a loophole” or “correct an anomaly”, but which in fact imposes tax where none was imposed before (even if the tax has been collected) [141]
  • if a bill replaces an existing tax (even if at a lower rate)[142]
  • if a bill imposes a tax but allows the regulations to set or vary the rate of the tax[143]
  • if a bill repeals a sunset provision in the principal Act that would terminate the imposition of a tax[144]
  • if a bill removes a tax exemption for a class of taxpayers.[145]

On the other hand, the following circumstances have been regarded as not being an imposition of taxation and therefore not requiring amendments to take the form of requests:

  • where a bill validates tax unlawfully imposed by regulations[146]
  • where a bill provides for the indexation of taxation[147]
  • the imposition of charges on Commonwealth entities only[148]
  • where a bill empowers the making of regulations to impose a tax.[149]

On occasions the Senate has made requests for the insertion of appropriation provisions in bills originating in the House.[150] On these precedents, it could be argued that it would be open to the Senate to request the insertion in a bill originating in the House of a provision having the effect of imposing taxation. The better view, however, is that such amendments may not be moved in the Senate at all, in that, by turning a bill into a bill imposing taxation, they are contrary to the initiation provision of the first paragraph of section 53 of the Constitution.[151]

(c) increase in any proposed charge or burden on the people

Section 53 of the Constitution provides in the third paragraph that the Senate may not amend any proposed law so as to increase any proposed charge or burden on the people. Any amendment to a bill which would have this effect must be moved in the Senate by way of a request to the House of Representatives for an amendment. This expression is used only in section 53, and its interpretation is therefore a matter for the two Houses in their dealings with each other.

The interpretation of this provision has been the subject of much discussion in the Senate in the past, and, in particular, was the subject of an extensive debate in the Senate in 1903 in relation to the Sugar Bounty Bill.

The Senate may not initiate bills imposing taxation or appropriating money. The Senate may not amend bills imposing taxation or appropriating money for the ordinary annual services. In the absence of the latter prescription, the Senate would be able to initiate by way of amendment that which it may not initiate by way of its own bill. By the Senate making requests to the House of Representatives for amendments to such bills, the initiative of the House in proposing the imposition of taxation and the appropriation of money is preserved. The further prescription in the third paragraph of section 53 similarly ensures, in relation to appropriation bills which the Senate may otherwise amend, that is, bills appropriating money other than for the ordinary annual services, that the Senate does not initiate by way of amendment that which it cannot initiate by way of its own bill, namely, a further appropriation of money.

The paragraph should therefore be regarded as applying only to that category of bills which the Senate may not initiate but which it may amend, that is, bills appropriating money other than for the ordinary annual services. To seek to apply the paragraph to any other category of bills immediately makes nonsense of it and defeats its purpose. If the paragraph is interpreted as prescribing against the Senate amending a bill which it may initiate, this means either that the Senate may not amend a bill which it has introduced, an obvious nonsense, or that the Senate may not amend a bill for the reason only that the bill has been introduced in the House of Representatives rather than the Senate, which is also a nonsense. It makes no sense to seek to prevent the Senate doing by way of amendment that which the Senate may do by initiating or amending its own bill; the Senate could circumvent such a prescription by refraining from consideration of a bill sent to it by the House, and sending to the House its own bill with a message indicating that its consent to the original bill is dependent upon the House’s consent to the Senate bill. Not only would the supposed prescription thereby be avoided, but the implied extension of the exclusive right of the House to initiate the prescribed kinds of proposals would be undermined.

Therefore the paragraph applies only to bills which the Senate may not initiate but may amend, that is, appropriation bills other than those for the ordinary annual services of the government.

If this interpretation is not adopted, it is not possible to find any coherent purpose of the paragraph; any other interpretation immediately entails a view that the paragraph has no coherent purpose.

Early discussion of the paragraph

This was the interpretation of the third paragraph adopted at the later constitutional conventions, and in the early parliamentary discussion of the paragraph.

At the conventions, it was pointed out that the difference between an amendment and a request would be a matter of procedural form only and not a matter of substantive power, and this was given as a reason for opposing section 53 in the form to which agreement was eventually given.[152] The same view was repeatedly expressed in the first and only comprehensive debate in the Senate on the interpretation of the paragraph.[153] This observation has repeatedly been made since that time, including by the Leader of the Government in the Senate.[154] As will be seen, it was a major factor in the subsequent somewhat careless application of the paragraph.

The claim that there is no substantive difference between amendments and requests, and that it is a matter merely of procedural form, has never been refuted except in terms of the foregoing interpretation of the third paragraph, that it is designed to preserve the initiative of the House in respect of imposition of taxation and appropriations.

When challenged with the assertion that there would be no difference between amendments and requests, Edmund Barton, the leader of the convention, explained the provision in terms of preserving the initiative of the House of Representatives. An amendment, he said, would allow the Senate to put back on the House of Representatives the responsibility for determining whether the measure would pass, whereas a request would ensure that the Senate could not avoid that responsibility. The bill would remain as the House of Representatives had initiated it, and if the House declined to change it at the request of the Senate, the Senate would have to decide whether to agree to the House’s bill.[155]

The exposition of the third paragraph by Quick and Garran clearly states that it applies only to those bills which the Senate may not initiate but may otherwise amend, that is bills appropriating money other than for the ordinary annual services, and is designed to preserve the House’s originating prerogative:

The second paragraph of sec. 53 takes from the Senate absolutely the power to amend tax bills and annual appropriation bills, whilst the third paragraph restricts its power to amend other appropriation bills. [emphasis added]

Seeing that the Senate cannot amend a bill imposing taxation, it may be naturally asked — how can the Senate possibly amend a proposed law so as to increase any proposed charge or burden on the people? The answer is that the Senate is only forbidden to amend tax bills and the annual appropriation bill; it may amend two kinds of expenditure bills, viz.: those for permanent and extraordinary appropriations. ..... The Senate may amend such money bills so as to reduce the total amount of expenditure or to change the method, object, and destination of the expenditure, but not to increase the total expenditure originated in the House of Representatives.[156]

Garran apparently subsequently changed his mind in that regard, but his later view creates many difficulties. [157]

The first and only comprehensive debate on the interpretation of the paragraph in the Senate was occasioned by an assertion by the House of Representatives that a Senate amendment to a bill should have been a request because it fell within the terms of the paragraph, in that it would increase expenditure under an appropriation in the bill. The message from the House supported this assertion on the ground that the amendment was said to be “an infraction of the provisions of section 53 of the Constitution, which prohibits the Senate from originating a proposed law appropriating revenue or moneys”, as well as the ground of infringement of the third paragraph itself; that is, the third paragraph was seen as supporting the provisions concerning origination.[158] The minister leading for the government in the debate similarly supported the contention that a request was necessary on the basis that an amendment violated the right of the House to originate appropriations.[159] This theme was emphasised by others during the debate.[160] The minister was similarly insistent that a bill must propose an appropriation in order to fall within the prescription of the third paragraph:

Of course, if the bill does not make an appropriation, we can do anything we like with it.[161]

It was clear then, from this early discussion, that the third paragraph was taken only to prevent the Senate doing by way of amendment that which it could not do by way of initiating a bill, to apply only to appropriation bills which the Senate could otherwise amend, and to prevent only an amendment which would increase expenditure under the appropriation.

This was a rational and coherent interpretation of the paragraph, and an answer, the only coherent answer, to the repeatedly-made observation that there is no difference, other than of procedural form, between an amendment and a request.

Rationale for the application of the third paragraph to appropriations

There has been general agreement that the expression charge or burden refers to appropriations of money (its supposed application to matters other than appropriations is dealt with below). An appropriation of money is a charge or burden on the people in the sense that it is a charge on the public funds. An amendment to a bill which would increase expenditure under a bill out of money proposed to be appropriated for that purpose is an amendment which would increase a proposed charge or burden on the people.

On the basis of this analysis, it would appear at first sight that the interpretation of the relevant provision is relatively easy: if a bill contains a proposed appropriation of money, and an amendment would have the effect of requiring increased expenditure under that appropriation, for example, by increasing the payments which are to be made under the appropriation, the amendment would need to be in the form of a request.

The question soon arose, however, of the application of the paragraph to an amendment to a bill which did not itself contain an appropriation but which amended an act which contained an appropriation in such a way as to affect expenditure under the appropriation. Should such an amendment which would increase expenditure under the standing appropriation be moved in the form of a request?

Strong arguments could be advanced, on the basis of the 1903 debate and previous authority, that the third paragraph did not apply to such an amendment. The bill would not of itself propose an appropriation. Moreover, such a bill could presumably be introduced in the Senate, and, as has already been noted, the application of the paragraph to a bill which may be introduced in the Senate undermines the only coherent purpose and rational application of the paragraph.

Unfortunately, when this question arose in the Senate in relation to the Surplus Revenue Bill 1910, it was not considered. A request was moved, and when the necessity for a request was questioned, the matter was brushed aside with the by then familiar remark: “What does it matter whether we proceed by way of request or amendment?”[162] The request was then agreed to.

In this unsatisfactory way it was established that a request was required for an amendment to a bill which would increase expenditure under an appropriation in an act to be amended by the bill.

The situation could be rationalised by the thesis that such a bill contains an implied appropriation, but there is still the problem that such an amendment could be initiated by way of a Senate bill[163] and could presumably be made by way of an amendment to a bill first introduced in the Senate. The case thereby extended the application of the third paragraph in a way which undermined its rationale as a safeguard of the initiative of the House of Representatives.

The interpretation of the provision has also been complicated in relatively recent years by certain unfortunate features of the framing of government legislation. These features are called unfortunate because, apart from complicating the interpretation of the relevant provision, they also amount to a removal of appropriation and expenditure from parliamentary control and supervision. These aspects of legislation include the proliferation of standing and indefinite appropriations (see above under Standing or special appropriations).

The use of standing and indefinite appropriations and bills which amend the legislation containing those appropriations means that appropriations are separated from the provisions that affect the expenditure which may be made under them. It may be argued, as indeed it was argued during the 1903 Senate debate, that, on a strict interpretation of the relevant provision in section 53, if a bill does not contain a specified appropriation there can be no question of any amendment to it increasing a proposed charge or burden. This interpretation, while probably strictly correct, has not been followed, and it has been accepted that a bill proposes a charge or burden if it amends other legislation which contains an appropriation. This is a very loose interpretation which could, if carried to its logical conclusion, lead, as was pointed out in the 1903 debate, to virtually every amendment becoming a request, because virtually every amendment has an impact on an appropriation which exists somewhere. Fortunately the interpretation has not been carried to that logical conclusion, but it does indicate the difficulty of drawing clear lines in the application of the relevant provision of section 53 if a direct connection between an amendment and increased expenditure is not required as a condition for a request.

The problem is exacerbated by the complexity of provisions in bills passed by the Parliament in recent years which determine whether expenditure is to occur. Usually these provisions take the form of providing that expenditure may occur if certain factors apply, and the expenditure will occur only if the factors apply and relate in a certain way. These kinds of provisions often make it difficult to determine whether there is going to be any expenditure under a bill at all, and, if so, how much, and thereby make it doubly difficult to determine whether particular amendments will have the effect of increasing expenditure.

The Senate’s requirement for requests to be accompanied by statements of reasons by their mover as to why they were framed as requests and by the Clerk of the Senate as to whether the framing of such amendments as requests is in accordance with the practices and precedents of the Senate has had a beneficial effect in providing explanations of the effect of amendments, exposing faulty reasoning and encouraging adherence to the practices and precedents of the Senate. As a consequence, with the exception of consideration of private senators’ bills with financial implications, there have been fewer disagreements between the Houses on these matters in recent years.

In the course of consideration of earlier cases of disagreement,[164] various papers were tabled in the Senate. In papers prepared by the Clerk of the Senate, it was suggested that an amendment to a bill relating to a standing or indefinite appropriation should not be regarded as increasing a proposed charge or burden unless the amendment would clearly, necessarily and directly cause an increase in expenditure under the appropriation. The contrary view appears to be that amendments have to be considered on a case-by-case basis without the application of any such general principle.[165]

Whether an amendment would clearly, necessarily and directly cause an increase in expenditure under an appropriation has subsequently been used as a test by Chairs of Committees in considering whether amendments circulated in the form of requests are in accordance with the practices and precedents of the Senate. The test provides a clear and principled basis on which to determine whether the circumstances require the Senate to refrain from exercising its usual power of amendment in accordance with constitutional principle.

The need for such a test is particularly apparent in relation to bills which confer discretions on ministers and other office-holders to determine whether payments are made and therefore to determine whether expenditure occurs. In many cases these discretions are not governed by any objective factors. Many appropriations authorise expenditure which is not statutorily required, as it is, for example, by provisions which create entitlements to payments. Expenditure under such appropriations depends on the decisions of officials in the sense that it may be decided to make savings by not spending up to the authorised level, or not spending at all. This is quite different, however, from provisions which explicitly empower ministers and other officials to determine whether payments are made, and if so in what amounts. In relation to the former type of provision, the Senate advanced an argument in 1981 that an amendment which merely affects such a discretion need not be a request and that such an amendment was in accordance with section 53.[166] The principle which may be drawn from that resolution is that a request is not required for an amendment which removes a ministerial power which may be exercised in such a way as to reduce expenditure under a bill.[167]

The need for requests to be made in accordance with the third paragraph of section 53 has also been regarded as unnecessary in the following circumstances:

  • where the connection between an amendment and an ultimate increase in expenditure involved too many links in the chain of causation and would be simply too indirect and uncertain to warrant the amendment taking the form of a request[168]
  • where the effect of an amendment on total expenditure under a bill was uncertain[169]
  • where an amendment would not in practice result in additional expenditure[170]
  • where a bill proposes to restrict eligibility for payments under an act which contains a standing appropriation, and the Senate’s amendments remove or liberalise the restrictions, those amendments do not need to be requests, although their effect is to increase the total of expenditure which would otherwise have occurred had the bill been passed without amendment[171]
  • where it is not possible to determine the effect of an amendment on expenditure[172]
  • where it is stated that amendments circulated as requests would not result in greater expenditure from the standing appropriation contained in the act amended by the bill[173]
  • where an amendment would make expenditure from standing appropriations in other statutes “legally possible” (in other words, section 53 of the Constitution should be read as if it referred to notional charges or burdens rather than real charges or burdens) [174]
  • where an amendment changes the timing of a payment but has no impact on the total amount payable[175]
  • where an amendment may result in increases of expenditure from funds not yet appropriated or which authorise ministers to take action which may result in increased expenditure[176]
  • where an amendment to a bill appropriating money other than for the ordinary annual services of the government, would change the allocation of proposed expenditure and the purposes for which money is to be appropriated, provided that the total proposed expenditure of the bill is not increased.[177]

As noted above (under Initiation of bills with financial implications) whether a message under section 56 is produced in the House of Representatives has not been regarded by the Senate as an infallible guide as to whether any expenditure is involved. In debate in the House of Representatives on the States Grants (Technical and Further Education Assistance) Bill 1988, the responsible minister quoted an opinion by a government adviser which indicated that the amendment to the bill was one which required a message under section 56 of the Constitution.[178] In other cases in the past where there has been dispute about whether an amendment moved in the Senate infringed the rule concerning a proposed charge or burden on the people, the government has sought to establish that the amendment should take the form of a request by advising that a Governor-General’s message would be necessary if the amendment were passed by the House of Representatives.

In debate on the Trade Practices Revision Bill 1986, Senator Macklin pointed out that a message had been brought into the House of Representatives in connection with the bill. The bill did not contain any appropriation of money, and nor did the Trade Practices Act which it amended; the money necessary for expenditure under the Trade Practices Act is appropriated by the annual appropriation bills. There was a clause in the bill which enlarged the category of proceedings in respect of which, under the principal act, financial assistance might be granted by the Attorney-General. The funds necessary for this assistance were not appropriated by the bill or the Act, but were contained in annual Appropriation Bill (No. 1), and when the relevant section of the principal act was passed no message was produced. It was clear, therefore, that a Governor-General’s message should not have been brought into the House of Representatives in respect of the bill. In response to Senator Macklin, Senator Evans, the Minister representing the Attorney-General, said that the introduction of the message represented an “abundance of caution” on the part of the Office of Parliamentary Counsel (the government drafting office). Senator Macklin asked why any caution at all was required, since the requirements of sections 53 and 56 of the Constitution are not justiciable. Senator Evans then conceded that the bill was not an appropriation bill and that the message should not have been produced.[179]

This incident demonstrated some of the issues of interpretation referred to, and also demonstrated that an opinion by government advisers that an amendment should have been a request cannot be taken as an infallible answer to the question.

In its judgment in 1995 in the proceedings relating to the Native Title Act 1993,[180] the High Court dealt with a submission that the Native Title Act was invalid because the amendments made to the Native Title Bill in the Senate were contrary to section 53 of the Constitution. The Court rejected the submission. In finding that the provisions of section 53 are not justiciable, the Court observed: “Section 53 is a procedural provision governing the intra-mural activities of the Parliament” (emphasis added). More significantly, the Court made the following observation: “In any event, the submission of want of conformity with s. 53 appears to be without merit. None of the Senate amendments appears to increase a ‘charge or burden on the people’ ” (at 482). This confirmed the treatment of the amendments by both Houses at the time. They were moved in the form of amendments and not as requests because they did not directly increase expenditure under any appropriation contained in the bill or in any act amended by the bill. One of the Senate’s amendments to the bill, however, established the Parliamentary Joint Committee on Native Title. This caused increased expenditure from a standing appropriation contained in the Remuneration Tribunal Act 1973, as modified by the Remuneration and Allowances Act 1990, in respect of remuneration of the chair of the committee and travelling allowances for members of the committee. The increased expenditure was automatic; no action by the Remuneration Tribunal was necessary. This suggests that the High Court took a view of the third paragraph of section 53 similar to that expounded here: only a very direct effect on an appropriation is regarded as an increase in a charge or burden.

Rationale for the third paragraph not applying to taxation bills

A foundation of the 1903 debate in the Senate and the outcome of that debate was, as has been noted, the observation that the third paragraph of section 53 must apply to appropriation bills because it cannot apply to bills imposing taxation, which cannot be amended in any way. Therefore, notwithstanding that the expression “charge or burden” is suggestive of taxation, most senators on both sides of the debate rejected any notion of any such application. Much of the speech of Senator Symon, who supported the contention that the expression referred to appropriations, was taken up by citations of persuasive authorities that the expression in fact historically referred to appropriations.[181]

There is obviously a profound logical difficulty in any attempted application of the paragraph to taxation legislation. In order to fall within the prescription of the paragraph, an amendment must increase a proposed charge or burden contained in a bill. If a bill contains a proposed charge or burden, it must, on any reasonable construction of that expression if it is to have any application to taxation legislation, be a bill imposing taxation, which therefore cannot be amended at all. If an amendment is to increase a proposed charge or burden, there must be a proposed charge or burden to increase, that is, there must be an imposition of taxation.

This logical analysis provided an equally profound difficulty for those who wished to argue that the third paragraph has no application to appropriations. They were compelled to look for something else which may be referred to by the expression “charge or burden”, and which is not an imposition of taxation or an appropriation. Perhaps, it was said, it refers to fines or fees, which are excluded from the definition of appropriations by the first paragraph of section 53. This argument has subsequently had appeal to some.[182] Senator Baker came to the conclusion that the paragraph must refer to loan bills.[183] Both of these arguments involve the difficulty that the kinds of bills contemplated can be introduced in the Senate, a difficulty which Garran swept aside by declaring that the paragraph refers only to bills first introduced into the House, without considering the further difficulty arising from such a view. These arguments were not convincing at the time, and have become less convincing with the passage of time.

One senator in 1903 suggested that the paragraph could apply to bills which do not impose taxation but which provide for “machinery”, an amendment to which might widen the scope of the taxation. This suggestion, however, was made in the context of a somewhat strange argument that the paragraph operated to prevent both amendments and requests, and was immediately dismissed and not taken up by any other speaker. It was thought, quite reasonably, and consistently with the arguments advanced in the debate, that an amendment which would have the effect of increasing tax would have to affect the imposition of the tax and not merely the “machinery” provisions, and in any other case such an amendment would be in effect a proposed law imposing taxation under the first paragraph of section 53.[184]

Thus the conclusion drawn in the 1903 debate is that the paragraph applies to appropriation bills otherwise amendable by the Senate and could have no application to taxation bills.

At first sight it may be thought that there is one obvious exception to this rule. A bill which reduces or abolishes a tax may be regarded as a bill which does not impose taxation. It may appear to be contrary to the third paragraph for the Senate to amend such a bill to substitute a higher rate of tax than that proposed. This apparent exception, however, conforms with the interpretation of the third paragraph here expounded. While the Senate could introduce its own bill to abolish a tax, when the question is posed: could the Senate introduce its own bill to raise the level of a tax?, the answer is clear: it could not, because such a bill would in that context clearly be a bill imposing taxation. The Senate may not do by way of amendment that which it may not do by initiating its own bill. Therefore an amendment may not be moved in the Senate to raise the level of a tax or to apply a tax where no tax is currently levied. This is not an application of the third paragraph of section 53 but an application of the first paragraph: such an amendment to such a bill would indeed be a proposed law for imposing taxation.

On occasions the Senate has made requests for the insertion of appropriation provisions in bills originating in the House.[185] On these precedents, it could be argued that it would be open to the Senate to request the insertion in a bill originating in the House of a provision having the effect of imposing taxation. The better view, however, is that such amendments may not be moved in the Senate at all, in that, by turning a bill into a bill imposing taxation, they are contrary to the initiation provision of the first paragraph of section 53 of the Constitution.[186]

An argument has been mounted from time to time that in the third paragraph the word “charge” refers to taxation while the word “burden” refers to appropriations, an argument which may appeal on linguistic ground alone, but there is no historical basis for such a contention. It was well said in the 1903 debate that “charge or burden” is a “drag-net” phrase, and the historical analysis and argument then presented sufficiently establish that “charge” historically referred to appropriations and that both words refer to appropriations.[187]

Prior to the Taxation Laws Amendment Bill (No. 4) 1993, there were no precedents of the Senate making requests for amendments to bills which did not impose taxation for the reason only that the amendments would increase liability to pay a tax imposed under another bill or act. The Senate declared in relation to that bill that its action in making requests did not commit it to a view as to the application of the third paragraph of section 53 to that bill or in similar cases.

In debate on the Taxation Laws Amendment Bill (No. 4) 1993 on 22, 23 and 24 March 1994, it was pointed out that the bill was classified as a bill not imposing taxation, but government amendments which were moved to the bill were framed in the form of requests apparently because it was thought that the amendments would increase the taxation liability of taxpayers. It was suggested that this highlighted again the difficulties arising from the government’s classification of taxation legislation, and the claim that a bill can increase taxation without being a bill imposing taxation within the meaning of section 53 of the Constitution, and that Senate amendments can increase taxation without imposing taxation and should then take the form of requests. This view was the basis of the dispute concerning the taxation legislation arising from the 1993 budget, which resulted in the government withdrawing and reframing its taxation bills (see above).

In this case the Senate agreed to the requests for amendments but passed a declaratory resolution, similar to resolutions used for the 1993 taxation legislation (see above), declaring that in agreeing to the requests the Senate did not necessarily accept that requests were appropriate and had not arrived at any concluded view as to the application of sections 53 and 55 of the Constitution to the bill.[188]

The problems with the interpretation advanced by the government’s advisers were also well illustrated by a bill introduced by the government in the Senate and passed on 4 May 1994. The Customs Tariff Amendment Bill 1994 increased rates of customs duties, but was classified as a bill which did not impose taxation and was introduced in the Senate. According to the view of the government’s advisers, the Senate could have amended the bill to increase further the rates of duty. Thus the House of Representatives would not only receive from the Senate a bill which increased taxation but which had been amended by the Senate to increase the taxation beyond the level proposed by the government. This would completely undermine the main purpose of section 53, which is to give the House of Representatives the exclusive right to introduce taxation imposition and appropriation measures.

The Chair of Committees has directed that government requests to bills dealing with taxation be moved in the form of amendments where the amendments have been proposed as requests apparently because of a view on the part of government advisers that they might result in higher taxation by comparison with the bill, as distinct from the status quo in the absence of the bill. The chair has pointed out that the Senate has not accepted such a strained interpretation of the charge or burden provision.[189]

In relation to amendments which might increase tax payable, the constitutional provision refers to an amendment which would increase any proposed charge or burden, and the view taken in the Senate since 1903 is that a bill dealing with taxation does not contain a proposed charge or burden unless it is a bill imposing taxation. Amendments of this kind are therefore directed by the chair to be moved as amendments. The claim that any amendment which might be regarded as in any way disadvantageous to taxpayers should be a request was also not accepted.

On the other hand, the government drafters have taken the view that amendments which reduce the taxation payable should be requests on the basis that appropriations may increase to compensate for the lost revenue! In one case a Governor-General’s message was prepared (but not used) to recommend the appropriation supposedly arising from the amendments. Where it has been indicated that an amendment will give rise to tax refunds payable out of a standing appropriation, the Senate has accepted that the amendments should be requests.

On occasions government amendments to bills dealing with taxation have been initially presented as requests despite the explanatory memoranda indicating that they would have no financial impact.


63. The last supply bills were introduced and passed in May 1996 following a change in government and a decision to postpone the Budget (and therefore the introduction of the main appropriation bills) till August for that year only.
64. Usually called Appropriation Bill (No. 1), Appropriation Bill (No. 2) and Appropriation (Parliamentary Departments) Bill.
65. Usually called Appropriation Bill (No. 3), Appropriation Bill (No. 4) and Appropriation (Parliamentary Departments) Bill (No. 2).
66. Usually called Supply Bill (No. 1), Supply Bill (No. 2) and Supply (Parliamentary Departments) Bill. Following a change in the budget cycle in 1994, these bills are not necessarily required.
67. See, for example, 30/11/1995, J.4320-1; 24/6/2004, J.3697-8.
68. Appropriation (Supplementary Measures) Bills (Nos 1 and 2) 1999, 11/10/1999, J.1815.
69. SD, 14/9/2005, p. 37.
70. See also report by the Finance and Public Administration Committee, Transparency and accountability of Commonwealth public funding and expenditure, PP 47/2007; response by the Chairs’ Committee presented 21/6/2007, J.4028.
71. Pape v Federal Commissioner of Taxation (2009) 238 CLR 1.
72. For a comprehensive history of the exposition of the phrase see ASP, 6th ed., 1991, pp. 569-80.
73. A detailed account of the establishment of the Compact of 1965 is in ASP, 6th ed., 1991, pp. 580-3.
74. PP 130/1976.
75. 17/2/1977 J.572.
76. 22/4/1999, J.777.
77. 41st report of the committee, PP 360/2004; 8/12/2004, J.273.
78. 15/3/2005, J.499-500.
79. 17/8/2007, J.4254.
80. 14/2/2008, J.152; see also statement by the Chair of Committees in relation to the Appropriation (Regional Telecommunications Services) Bill 2005-2006, SD, 14/9/2005, p. 37.
81. See Report No. 25 of 2005-06 of the Auditor-General, pp.40-41; Appropriations and Staffing Committee, Annual Report 2005-06, PP 157/2006; Annual Report 2006-07, PP 138/2007; report of Finance and Public Administration Committee on annual reports, PP 206/2007; report on additional estimates 2007-08, PP 230/2008; Appropriations and Staffing Committee, 45th Report, PP 148/2008: this report called for a return to the position formerly agreed between the Senate and the government.
82. J.322.
83. 19/3/2009, J.1865, 1868-9.
84. SD, 11/8/2009, p. 4483.
85. 16/9/2009, J.2511.
86. PP No. 129/2010.
87. J.3642-43.
88. Finance minister's response tabled 28/9/2010, J.41; ‘Agreement for a better parliament – parliamentary reform’, tabled in the House of Representatives VP, 20/10/2010, 99.
89. 15/6/2011, J.979.
90. SD, 1/9/1993, p. 740.
91. See Chapter 12, Legislation, under Division and consolidation of bills.
92. Statements by the Chair of Committees, SD, 26/11/1997, p. 9461; 4/4/2001, p. 23731.
93. See below, under When are requests required? (b) bills imposing taxation.
94. 8/11/1988, J.1104; precedents for removal of retrospective provisions: 22/5/1990, J.121; 31/5/1990, J.195.
95. See Report on the Operations of the Committee 1990-1993, October 1993, PP 208/1993, pp.16-20.
96. 29/6/1995, J.3591-3.
97. Customs Act, ss. 226 and 273EA ; Excise Act, ss. 114 and 160B.
98. 29/6/2000, J.2980.
99. 12/8/2003, J.2089-90; 1/4/2004, J.3324-5.
100. 17/6/2008, J.498.
101. 18/3/2009, J.1761-3, 1774-6.
102. 13/5/2009, J.1925-6. Bills to continue collection of the taxes were finally passed in August 2009.
103. 18/6/2009, J.2111-2.
104. PP 217/1979.
105. The Financial Management and Accountability Amendment Bill 2000, which belied its title, and which was passed in connection with the government’s new tax scheme, added an indefinite amount to every annual and standing appropriation in every statute, but it was explained that this was a “bookkeeping” device not actually increasing expenditure.
106. A bill to abolish standing appropriations and to make all appropriations subject to annual renewal was introduced in the Senate in 1986 by Senator Vigor: 24/9/1986, J.1229. Contrast the position in the Australian Capital Territory where all appropriations are annual appropriations.
107. Report No. 15, 2004-05, PP 240/2004.
108. 29/11/2004, J.122; SD, 29/11/2004, pp. 74-8.
109. SD, 10/10/2005, pp. 16-17; Fourteenth Report of 2005, Accountability and Standing Appropriations, PP 461/2005.
110. Reports Nos 24 of 2003-04, PP 8/2004; 28 of 2005-06, PP 28/2006; and 31 of 2005-06, PP 53/2006.
111. Transparency and accountability of Commonwealth public funding and expenditure, PP 47/2007; response by the Chairs’ Committee, 21/6/2007, J.4028.
112. See the case of the Trade Practices Revision Bill 1986, particularly the exchange between Senator Macklin and Senator Gareth Evans, SD, 30/4/1986, p. 2072, and other cases mentioned below, under When are requests required? (c) increase in any proposed charge or burden on the people.
113. See, for example, the National Vocational Education and Training Regulator Bill 2010 and related bills, introduced in the Senate to establish a new statutory body to regulate the sector, funding for which was to be provided in the annual appropriation bills. The Tertiary Education Quality and Standards Agency Bill 2011 and related bills, also introduced in the Senate, used the same funding mechanism.
114. Such provisions often take the following form: “Payments for the purposes of this Act are to be made from funds appropriated by the Parliament for the purpose”.
115. 4/10/1984, J.1153; 18/10/1995, J.3958-9; 18/6/1996, J.327.
116. Statement by President Calvert, SD, 16/9/2003, p. 15275.
117. Same-Sex Relationships (Equal Treatment in Commonwealth Laws—Superannuation) Bill 2008.
118. Urgent Relief for Single Age Pensioners Bill 2008; see Clerk's advice to senators, SD, 24/9/2008, pp.5528-30; see also below under When are requests are required? (c) increase in any proposed charge or burden on the people.
119. See correspondence between the Leader of the Government in the Senate and the President of the Senate, tabled 17/11/2010, J.324, and Clerk's submission on the bill to the Education, Employment and Workplace Relations Legislation Committee. Also see VP, 21/2/2011, 310-1, 312-3, HRD, pp. 598-619, 645-63.
120. Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010; 16/6/2011, J. 999, 1002-3.
121. The High Court has noted the special nature of appropriation acts, including in Victoria v Commonwealth (1975) 134 CLR 81 and Pape v Federal Commissioner of Taxation (2009) 238 CLR 1.
122. Statement by Chair of Committees, A New Tax System (Family Assistance and Related Measures) Bill 2000, SD, 11/4/2000, p. 13807.
123. Statement by Chair of Committees, Further 1998 Budget Measures Legislation Amendment (Social Security) Bill 1999, SD, 20/9/1999, p. 8438.
124. See appropriation bills designed to replenish money spent by agencies for relief of victims on the 2004 tsunami, 15/3/2005, J.499-500; bills to implement the Northern Territory Emergency response, 17/8/2007, J.4254; and bills to cover expenditure on an equine influenza outbreak, 14/2/2008, J.152.
125. 8/9/1981, J.474, 16/9/1981, J.503, 23/9/1981, J.521.
126. See also rulings of President Givens, SD, 10/12/1921, p. 14274, 19/7/1923, p. 1302; the Income Tax Bill 1943, recounted in ASP 6th ed., 1991, pp. 592-3; ruling of Acting Deputy President Sibraa, 4/5/1984, J.822-3; and the amendment made by the Senate to the Taxation Laws Amendment (Rates and Provisional Tax) Bill 1990, 17/10/1990, J.346.
127. 30/8/1993, J.396.
128. 31/8/1993, J.412.
129. 2/9/1993, J.440.
130. 31/8/1993, J.420.
131. 27/9/1993, J.498.
132. 30/9/1993, J.548.
133. 5/10/1993, J.570; 6/10/1993, J.587.
134. 20/10/1993, J.660.
135. 28/6/1995, J.3560-3.
136. SD, 31/8/1995, pp.761-2.
137. Statements by Chair of Committees, A New Tax System (Fringe Benefits) Bill 2000, SD, 10/5/2000, p. 14265; New Business Tax System (Alienation of Personal Services Income) Bill 2000, SD, 29/6/2000, p. 16068.
138. Governor-General Legislation Amendment Bill 2001, see statement by Chair of Committees, 21/6/2001, J.4376.
139. Excise Tariff Amendment (Condensate) Bill 2008, SD, 25/9/2008, p. 5638.
140. Customs Tariff Amendment Bill (No. 2) 1997 (No. 3), 26/11/1997, J 2985, SD, p. 9461; Medicare Levy Amendment (Defence—East Timor Levy) Bill 2000; Tax Laws Amendment (Luxury Car Tax) Bill 2008, SD, 22/9/2008, p. 5274.
141. Radiocommunications (Transmitter Licence Tax) Amendment Bill 2002; Bankruptcy (Estate Charges) Amendment Bill 2002.
142. A New Tax System (Goods and Services Tax Imposition—Excise) Bill 1998 which imposed a 10% goods and services tax on supplies in place of the former Wholesale Sales Tax.
143. Forest Industries Research Levy Bill 1993, 23/11/1993, J.862-3; Interstate Road Transport Charge Amendment Bill (No. 2) 2008, SD, 3/12/2008, p. 7989 (government amendments circulated as amendments). A bill which amends regulations so as to impose taxation where none was imposed before would seem to be a bill imposing taxation, but, by including other matters in such a bill, the government drafters seem to have taken the view that it is not (Migration Legislation Amendment Contributory Parents Migration Scheme) Bill 2002, 5/3/2003, J.1527-9).
144. Primary Industries (Excise) Levies Amendment Bill 2000, 8/6/2000, J.2781-2.
145. Sales Tax Laws Amendment Bill (No. 1) 1996, 26/11/1996, J.1122-3.
146. Wheat Tax Regulations (Validation) Bill 1987, 17/12/1987, J.458; Aircraft Noise Levy Collection Amendment Bill 2001.
147. General Insurance Supervisory Levy Amendment Bill 1996, 13/2/1997, J.1454; Road Transport Charges (Australian Capital Territory) Amendment Bill 2002, 14/3/2002, J.194.
148. Australian Radiation Protection and Nuclear Safety (Licence Charges) Bill 1998, 10/12/1998, J.404 and its amendment bill 2002, 29/8/2002, J.706. This principle was upheld by the High Court in Queanbeyan City Council v ACTEW Corporation Ltd [2011] HCA 40 in which the High Court held that imposts by the ACT Government on its wholly-owned corporation, ACTEW, were internal financial arrangements of government and not taxes.
149. Life Insurance Policy Holders’ Protection Levies Bill 1991, 19/12/1991, J.1987-8; Overseas Students Tuition Assurance Levy Bill 1993, 17/12/1993, J.1080.
150. 4/10/1984, J.1153; 18/10/1995, J.3958-9.
151. Statement by President Calvert, SD, 16/9/2003, p. 15275; statement by Presdient Hogg, SD, 19/3/2012, p.94 (proof).
152. George Reid, Australiasian Federal Convention, Melbourne, 7/3/1898, pp. 1997-8.
153. On the Sugar Bounty Bill 1903, SD, 2, 8, 22 and 23/7/1903, pp. 1691-1703, 1821-63, 2365-415, 2469-503. Speeches by Senators Higgs, MacGregor, Clemons, Millen, Symon and Pulsford, pp. 1836, 1843, 1852, 1854, 2404, 2384, 2482.
154. Senator Gareth Evans, SD, 1/9/1993, p. 740.
155. Edmund Barton, Australasian Federal Convention, Adelaide, 14/4/1897, p. 557.
156. Annotated Constitution of the Australian Commonwealth, 1901, pp. 668, 671.
157. In an opinion of 13/4/1950, presented to the Senate on 22/3/1994.
158. SD, 1903, p. 2365.
159. Senator O’Connor, pp. 2367, 2369.
160. Exchange between Senators Keating and Clemons pp.1854-5; Senator MacGregor p. 1845, Senator Millen pp. 2405, 2409.
161. Senator O’Connor, pp. 2369, 2406, 248.
162. Senator Pearce, SD, 25/8/1910, p. 2060.
163. See above under Initiation of bills with financial implications.
164. For details of some of the earlier cases of disagreement illustrating some of the problems of interpretation, see OASP, 12th ed., pp. 293-5.
165. The various papers are collected in a volume entitled Constitution, Section 53: Financial Legislation and the Houses of the Commonwealth Parliament, Papers on Parliament No. 19, Department of the Senate, March 1993. These papers refer only to the question of the effect of the provision on appropriation bills; for the effect on taxation bills, see below.
166. See proceedings on the States Grants (Tertiary Education Assistance) Bill 1981, 10/11/1981, J.633-4. The bill was laid aside by the House of Representatives.
167. See also statements by Chair of Committees, SD 20/3/1997, p. 1820; 25/9/1997, p. 6961; 2/12/1997, pp. 10130-31; the same principle applies to an amendment which would empower a minister to make determinations which could be exercised to increase expenditure otherwise to be made under the bill: statement by Chair of Committees, 21/6/2007, J.4043.
168. States Grants (Technical and Further Education Assistance) Bill 1988, see OASP, 12th ed., p. 294. The House having insisted on disagreeing with the amendment (21/12/1988, J.1376), the Senate did not further insist on it (6/3/1989, J.1436). Also see statement by Chair of Committees, Crimes Legislation Amendment (Serious and Organised Crime) Bill (No. 2) 2009, SD, 4/2/2010, p. 459; Tax Laws Amendment (Research and Development) Bill 2010, SD, 22/8/2011, p. 5093.
169. Social Security Legislation Amendment Bill (No. 4) 1991, see OASP, 12th ed., p. 294. After the amendments had been passed by the Senate and agreed to by the House of Representatives, a statement was made by the Speaker indicating a belief that the amendment in question should have been a request.
170. Local Government (Financial Assistance) Amendment Bill 1992, see OASP, 12th ed., pp. 294-5.
171. See government amendments moved in the Senate to the Social Security Legislation Amendment Bill 1990, 18/12/1990, J.6337; statements by the Chair of Committees, SD, 26/11/1996, p. 5968; 29/11/1996, p. 6379; 13/12/1996, p. 7490; 12/2/1997, p. 539. This principle appears to have been accepted by the government, see HRD, 2/12/1996, p. 7454.
172. HRD, 26/5/1993, pp. 904-6. Government amendments to the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Further 2008 Budget and Other Measures) Bill 2008 were also moved as amendments on this principle: 1/12/2008, J.1349-50, 1362.
173. Statements by Chair of Committees, Veterans’ Affairs Legislation Amendment (1996-97 Budget Measures) Bill 1996, SD, 12/2/1997, p. 539; Child Support Legislation Amendment Bill 1998, SD, 30/11/1998, p. 910, 7/12/1998, p. 1328;
174. Statements by Chair of Committees, Telecommunications (Consumer Protection and Service Standards) Bill 1998, SD, 27/5/1999, p. 5549; Indirect Tax Legislation Amendment Bill 2000, SD, 26/6/2000, p. 15556.
175. Statement by Chair of Committees, Tax Laws Amendment (Research and Development) Bill 2010, SD, 22/8/2011, p. 5093.
176. Statements by Chair of Committees, Telecommunications Bill 1996, SD, 20/3/1997, p. 1955; Social Security and Veterans’ Affairs Legislation Amendment (Family and Other Measures) Bill 1997, 25/9/1997, p. 6961; 2/12/1997, pp. 10130-31.
177. Appropriation (Works and Buildings) Bill 1910-11, 15/9/1910, J.98; see also J. Quick and R.R. Garran, Annotated Constitution of the Australian Commonwealth, 1901, p. 671; compare ruling of President Gould, 3/10/1907, J.134, in relation to an amendment widening the scope of a bounty but subject to a limited total appropriation: this ruling was clearly in error. Also see Higher Education Legislation Amendment (2005 Budget Measures) Bill 2005, 8/11/2005, J.1363; SD, 9/12/2005, p. 45. In the case of the States Grants (Primary and Secondary Education Assistance) Bill 2000, although the total effect of the Senate’s amendments was probably to reallocate the funds to be appropriated, the effect of amendments which would have reduced grants for some private schools was not sufficiently clear to conclude that the reductions would have funded amendments to increase grants in respect of children with disabilities. The latter were therefore moved in the form of requests, 9/11/2000, J.3549-50; 10/11/2000, J.3555-68.
178. HRD, 21/12/1988, pp. 3777-8; the opinion was also quoted in the Senate, SD, p. 4809.
179. SD, 30/4/1986, p. 2072.
180. Western Australia v Commonwealth (1995) 183 CLR 373.
181. SD, 22/7/1903, pp. 2391-8.
182. Opinion of Bailey, 21/4/1950, presented to the Senate on 23/3/1994 with that of Garran.
183. SD, 1903, p. 1843.
184. Senators Millen and Dobson, pp. 2403-8; Senator McGregor, p. 1845.
185. 4/10/1984, J.1153; 18/10/1995, J.3958-9.
186. Statement by President Calvert, SD, 16/9/2003, p. 15275.
187. Senator Higgs, p. 1829.
188. See also the statements by the Chair of Committees in relation to the Taxation Laws Amendment Bill (No. 4) 1994; SD, 8/12/1994, pp. 4267-8; and the Tax Law Improvement Bill 1997, SD, 26/6/1997, p. 5317.
189. Statements by Chair of Committees, Taxation Laws Amendment (FBT Cost of Compliance) Bill 1995, SD, 22/11/1995, p. 3722; Taxation Laws Amendment Bill (No. 4) 1995, SD, 1/12/1995, pp. 4570-1; Income Tax Rates Amendment (Family Tax Initiative) Bill 1996, SD, 20/11/1996, p. 5711; Customs Amendment Bill (No. 2) 1996, SD, 10/2/1997, p. 392; Taxation Law s Amendment Bill (No. 3) 1998, SD, 25/5/1998, p. 3022; A New Tax System (Fringe Benefits) Bill 2000, SD, 10/5/2000, p. 14265; Taxation Laws Amendment Bill (No. 8) 2000, SD, 7/12/2000, p. 21146.

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