FOR PRESS * 28 OCTOBER 1976
AUSTRALIAN CONSTITUTIONAL CONVENTION ITEM NO. H8
THE POWER OF THE SENATE IN RELATION TO. MONEY. BILLS
The motion moved by the Leader of the Opposition in -the
Commonwealth Parliament seeks to remove the Senate'spower
to reject, defer or in any other manner block the
passage of laws appropriating revenue or money, or imposing
taxation. I assume from the fact that this motion is moved, that in fact
past arguments as to whether the Senate had the power
it exercised in November 1975 have now been effectively
abandoned. It ought now to be clearly acknowledged
that the Sbnate has the power and that its use of the power was
fully constitutional.
Both sides of the Federal Parliament have recognised in the
past that the Senate has the power to disallow money bills.
This was actively contended by the then Opposition in 1970
and again by the Opposition in 1974.
In 1975 the power was not only claimed but was demonstrated
and the Senate's action was overwhelmingly endorsed by the
people. Section 1 of the Constitution clearly vests the
legislative power of the Commonwealth in a Federal Parliament
consisting of The Queen, the Senate, * and the House of Representative
Section 53 places certain limitations on the Senate's powers
to introduce and/ or amend money bills, but categorically states
that otherwise the Senate shall have equal power with the House
of Representatives in respect of all proposed laws.
Section 58 requires that a proposed law be passed by both
Houses before it is presented to the Governor General;
There is overwhelming agreement by Australian Constitutional
authorities that the Senate has the legal right to defer or
reject money bills. This has been explicitly stated by Quick
and Garran, -Odgers and others.
It has been claimed by some that the Senate's power to reject
a money bill " has atrophied and become a dead letter", that
there exists some convention that the power not be used.
This would seem to be a nonsense. Every money bill since
Federation has gone to the Senate for consideration by it.
The Senate has voted on each such bill. The power to consider and
vote cannot become atrophied.
How then can one say that the Senate must vote on a
bill but cannot say no, or, for that matter, defer
a decision?
If a Senator seeks to vote against a bill, is his vote
to be rejected? If not, how can the Senate be prevented
from rejecting a bill if that is how the majority of
Senators vote? Clearly, the Senate can also vote to defer
any matter.
It is interesting to note the recent judgement in Victoria
versus the Commonwealth in the Petroleum and Minerals
Authority Act. In this case of the three judges who
commented on the Senate's powers, each clearly indicated
that they were of the view that the Senate could reject any
bills including money bills.
As the Founding Fathers foresaw, it is of course only
proper that the Senate should have power to refuse passage
to any legislation, including money bills. The reasons
will be appreciated by the State delegates to this Convention
but I am sure they will bear with me if I reiterate them.
The money power in the Senate is vital for two main reasons:
1. It is a power which enables the removal of a
disastrous government: and
2. It provides important protection for the four less
populous States against the possibility-that the
taxpayers' money, raised uniformly per capita throughout
Australia, might be heavily concentrated within the two
larger States which have the numbers to dominate the
Lower House.
The Australian Constitution is a Federal constitution devised
by representatives of the States. They insisted that the Senate
as the States' House, have some control over Federal
expenditure. The States reflect an important element of Australian political
and social reality. Australia is to a considerable extent
composed of great regions which are largely reflected in our
State structure. The motion which would curtail the Senate
powers blatantly ignores this Federal reality and is not
in th interests of effective government. The Senate is an
essentia-l element of our system of government and in the
political cohesion of Australia.
One of the Senate's functions is to safeguard the interests
of the States. Another is to act as a house of review with the
responsibility of expressing second opinions in relation to
legislative and other proposals initiated in the House of
Representatives. 3
3.
The existence of a house of review brings an element
of moderation into government. The Senate plays a major
role in the preservation of our Federal democracy.
The Senate powers are checks and balances against any
concentration of unbridled power in the executive government,
or against any misus-e of power or mismanagement of a government.
The Senate is elected from-the same body of electors as is
the House of Representatives. It is a second democratic
chamber with a particular role in our Federal system of
goverment. With their commitments to-the basic concepts of Parliamentary
government, it would have been inconceivable to the Founding
Fathers that a governmetn might ignore the cardinal Parliamentary
convention that a government unable to pass supply through the
Parliament must go to an election. The blunt fact is
a fact on which Parliamentary supremacy over the executive
has always been founded that a government without money
cannot rule.
Sir Charles Court has suggested that the Constitution should
be strengthened by providing an automatic procedure by
which a failure to obtain supply can be resolved.
The present provisions, while they have proved adequate in the
event, provide great temptations to a government willing to
ignore convention and law.
Sir Charles sees the need for a procedure giving formal
expression in the Constitution of the long standing convention
that a government refused supply must face the people.
We must also consider that fact that it was only fortuitous
in November last that the necessary conditions existed at the time
for a double dissolution pursuant to Section 57.
Sir Charles has submitted that if the Senate refuses supply
to the government and the Prime Minister is thus forced to
seek an electi-on to resolve the issue,, then the Senate should
itself also face the judgement of the people,
that it should not simply be able to force the House of
Representatives alone to face the people.
The provision Sir Charles seeks, would of course, help to ensure
that the Senate will continue to recognise that its power to
refuse supply is a power not to be lightly exercised.
There is great weight in Sir Charles Court's view that if the
annuaA appropriation or supply bills fail to pass within thirty
days, there should be a double dissolution of the Parliament
and an election held and that the Constitution should provide
for this sequence of events.
The Parliament of our country includes the Senate. It is not
without significance that those who seek to restrict the powers
of the Senate are committed in party philosophy to the abolition
of the Senate totally anc' of the states. The Government which I
lead is not. On the contrary, we accept the Federal character
of the Australian Constitution. We accept that the Government
of Australia is the Crown, 1 the Senate and the House of I
4.
Representatives.
We believe that Federalism is, and ought to be,
a living reality in our Governmental structure and that
a Senate vested with the powers it has under the Constitution,
is a vital element in a cohesive Federal system.
The Senate's powers are deliberately grave. They should
be gravely exercised.
The provisions governing their exercise are capable of
improvement. It is in the direction of improvement that
we believe reform should be made.
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