Chapter 13 - Financial legislation
Scrutiny of expenditure proposals by standing committees
The Senate has a system which allows intensive scrutiny of government
expenditure proposals, or estimates, before the appropriation bills reflecting
those proposals are received by the Senate.
The basis of this system is the scrutiny of estimates, from 1970 to
1994 by estimates committees and from 1994 by the legislative and general
purpose standing committees. Schedules of the proposed expenditure contained in
the main annual and additional appropriation bills are tabled in the Senate
when the bills are introduced into the House of Representatives, and are
referred to the committees for examination.
These committees provide the principal opportunity for senators to
scrutinise, not only the expenditure proposals of the government, but the
operations and activities of government departments and agencies. In effect,
they have become twice-yearly general inquisitions into government operations.
As such, they are regarded by senators as among the most valuable of the
Senate’s activities.
The committees, for each group of
annual and additional appropriation bills, hold a main round of hearings at
which all items of expenditure are open to examination, and in relation to the
annual appropriation bills a supplementary round of hearings, after answers to
questions taken on notice are received, which are confined to matters senators
have notified for further questioning.
The committees report after their main hearings, and draw attention to
any matters for further consideration by the Senate. They do not necessarily
make any further reports after the supplementary hearings unless they have
specific recommendation to make, for example, a recommendation that a matter be
referred to a standing committee for further inquiry.
Strictly speaking, the committees have before them only the estimates
of expenditure reflected in the annual appropriation bills, and, as has been
noted, these account for less than 20 percent of government expenditure. In
practice, however, the whole range of government expenditure is examined by the
committees, particularly at the time of the main appropriation bills.
The introduction first of program budgeting and subsequently of
output-based accrual accounting by government departments reinforced the
practice. The requirements of estimates committees for more detailed
explanations of expenditure proposals led to the development by departments of
voluminous explanatory notes on the estimates and the tabling of those notes in
the Senate. With program budgeting these notes were replaced by program
performance statements, and then by output-based portfolio budget statements.
These statements are tabled in the Senate and used by the committees as the
basis of their scrutiny. (For a resolution of the Senate requiring further
explanations of items in program performance statements, see 2/6/1992,
J.2391-2.)
For directions to
committees to hold further hearings on estimates, see 7/2/1995, J.2895-6, 2897; 4/11/1996, J.836; 10/4/2000, J.2582-3, 2585; 28/6/2000, J.2958; 28/11/2000, J.3594-5; 12/3/2002, J.154-6; 25/11/2003, J.2709-10; 16/6/2004,
J.3473. (See Supplement)
It is considered
that normally the appropriation bills should not be passed until the committees
have concluded their hearings. The rationale for this is that the hearings may
lead to senators wishing to move amendments or requests to the bills. The
second reading debate on the bills may take place before the committees
conclude their hearings. There is no fixed rule relating to this matter, and it
has always been open to the Senate to pass the appropriation bills before the
committees have concluded their deliberations. (For a postponement of the
appropriation bills until the conclusion of estimates hearings, and debate on
the matter, see SD, 20/6/1995, pp 1464-6.)
The Senate has on
several occasions resolved, following reports of estimates committees,
that there are no areas of expenditure of public funds by statutory
authorities which are not open to scrutiny (9/12/1971, J.846; 23/10/1974,
J.283; 18/9/1980, J.1563; 4/6/1984, J.902-3; 19/11/1986, J.1424).
The committees must hear evidence on the estimates in public session
(SO 26(2)), and all
documents received by the committees are published (see proceedings on report
of Standing Orders
Committee, 28/9/1972, J.1146, SD, p. 1331-2).
Normally only the main annual and additional appropriation bills are
referred to the committees (precedent for
referral of special appropriation bills: 1/12/1992, J.3169).
Further details on estimates hearings are in Chapter 16, Committees.
When proposed expenditure contained in an appropriation bill has been
considered by a committee under these procedures, the bill is not considered in
committee of the whole unless a senator has circulated in the Senate a proposed
amendment or request for amendment to the bill. In that circumstance debate in
committee is confined strictly to the purpose of the amendment (SO 115(4); for
precedents see 29/3/1995, J.3185-6; 6/4/2000, J.2567; 13/4/2000, J.2637-9;
24/6/2004, J.3697-8).
The adoption of any recommendations of the committees may be proposed
by way of an amendment to the motion for the passage of any other stage of a
bill (18/11/1993, J.821; č31/10/1996, J.813).
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