In days of old, when Legislative Councils were appointed bodies, Labor Governments would try to swamp them with suicide squads of Members who once appointed would vote to abolish the House. Yesterday, the House of Representatives committed its own act of hara-kiri, passing a Bill in just over three hours that gave full authority to the Executive to spend money on whatever it wants without the need for further legislation or parliamentary scrutiny. It was an abject surrender of its powers of financial scrutiny to the Executive, and all to save a few chaplains (possibly ineffectively).
Last week, in the case of Williams v Commonwealth, the High Court held that the Commonwealth Government could not rely on executive power alone to support the funding of the chaplaincy program. Not even an Appropriation Act was enough to support it. There needed to be validly enacted legislation to support such expenditure. The Court stressed a number of points. First, this was public money that was being spent (not the private money of the Government) and that it therefore had to be subject to parliamentary scrutiny. Secondly, there is a need for parliamentary engagement in the formulation, amendment and termination of programs for the spending of money and there will be a ‘deficit in the system of representative government’ if these programs remain solely within the Executive’s domain. Thirdly, the Court pointed to ‘federal considerations’ and the fact that the public school system in a State ‘is the responsibility of that State’.
So how has the Commonwealth Parliament responded? Yesterday, with no opportunity at all for prior consideration or scrutiny, the House of Representatives passed the bland-sounding Financial Framework Legislation Amendment Bill (No 3) 2012. It gives legislative authority to the Executive to make, vary or administer any arrangement by which public money is paid out by the Commonwealth and the grant of financial assistance to any person whatsoever. The only constraint is that the arrangement or grant must be either specified in financial management regulations, or be included in a ‘class of arrangements or grants’ or a program mentioned in the regulations. The draft regulations show that these categories of approved grants and programs are extremely wide, including expenditure for ‘Foreign Affairs and Trade Operations’, ‘Payments to International Organisations’, ‘Public Information Services’, ‘Regulatory Policy’, ‘Diversity and Social Cohesion’, ‘Domestic Policy’ and ‘Regional Development’.
Another example, listed in the draft regulations, is the payment of funds for ‘Electorate and Ministerial Support Costs and Parliamentary Entitlements Support Costs’, the objective of which is described as: ‘To provide funds to support the provision of entitlements to the current Prime Minister, and to former Prime Ministers once they have left Parliament, the Australian Political Exchange Council and related activities, and political party secretariat training.’ Another description might be political slush funds. One can see why there may be reluctance to have parliamentary scrutiny of that!
Some of those speaking in the debate on the Bill, who had for the most part only seen the Bill as the debate commenced, seemed to be under the delusion that it was all about ensuring that funding to the chaplaincy program continued. Others seemed to think that the Bill just supported existing funding that was under threat. But the Bill goes much further than that. It gives the Executive carte-blanche to enter into such programs in the future without any parliamentary scrutiny at all as long as the program or grant comes under one of the existing broad descriptions in the regulations, or with only the need to amend the regulations (by executive action), if a new category needs to be inserted. Never has such enormous power been surrendered by the Parliament to the Executive in one hit – and certainly not with a debate that went scarcely over three hours.
The complete lack of understanding of what the House was doing is most poignantly evidenced in the speech by the Independent Rob Oakeshott. He lauded the High Court decision’s decision in the Williams case, saying that it ‘adds to the cultural shift in our institutions and marks a return to the importance of this chamber, the parliament and the parliamentary process and a reaffirmation of the states and the foundation blocks upon which this place and the whole concept of the Commonwealth are built.’ He went on to state:
In my view the Williams case will now establish two very clear paths for the future for anyone involved in the executive. One is through parliamentary processes and very clearly defining any grant programs through the parliament itself. The second one is by agreement with the states. If there is anything in this ruling, it is at its very heart saying to all of us, “Respect this chamber, respect this parliament and respect the role of the states in the delivery of programs and services to the communities.”
So what did Mr Oakeshott do? He voted for the Bill which ditches the use of Parliament to scrutinise and define grant programs or the making of grants through the States and instead gives full power to the Executive to do as it wishes. Mr Oakeshott even joined with the Government to vote down an Opposition amendment to put a sunset clause on the operation of the Act so that any problems could be sorted out in the meantime, with the passage of appropriate legislation or the transfer of funding into section 96 grants to the States. Amazingly, Mr Wilkie, Mr Windsor, Mr Bandt and Mr Katter all took the same approach, granting extraordinary powers to the Executive while negating their own roles in the House of Representatives.
Will this Bill, once enacted, be effective? It is really just setting up more stoushes with the High Court. What the Court stressed in the Pape case in 2009 and the Williams case last week, was that the Commonwealth must have a head of legislative power to support its spending. Where is the head of legislative power to support this Bill? Many of the programs listed in the draft regulations will fall under a head of legislative power, and it is conceivable (although contestable) that this Bill, once enacted, is enough to support them. But others will not be supported by a head of power and will remain invalid regardless of such a law. Hence, this Bill merely provides a fig-leaf for the Commonwealth’s legislative incompetence. It still leaves open the question of whether the Commonwealth has the legislative power to support the chaplaincy program along with many others.
Finally, what is most extraordinary above all is the fact that the Commonwealth Government seems so determined not to listen to the High Court. It ignored the High Court’s judgment in the Pape case, merrily going on with funding of bodies and programs without sufficient legislative power. In response to the Williams case it simply enacts a law that attempts to restore what it wrongly believed to be its former powers, without actually listening to or taking to heart the High Court’s concerns about a democratic deficit, the important role of parliamentary scrutiny and the importance of federal considerations. This Bill, in a bald-faced manner, rejects the fundamental propositions put by the High Court in the Williams case. The Commonwealth is clearly asking for another clobbering by the Court.