October 01, 2013

Horse 1547 - The Government Shutdown Wouldn't Have Happened In Australia

The 113th Congress has finally gone one step beyond the 112th Congress in terms of sheer pigheadedness and idiocy, gone several steps beyond the 80th Congress which President Truman cited as the "Do Nothing Congress" and has for the 18th time in American history, shut down the government.
Following a lengthy conversation that I had on Twitter, just like I asserted in Horse 1546 that Breaking Bad Wouldn't Have Happened In Australia, I now go on to suggest that a total government shutdown like what has just happened in the United States also would not have happened in Australia.
The reason for this is that the Australian Government simply doesn't work that way.

In the United States, the Executive Branch of Government and the Legislative Branch are entirely separate and distinct. This leaves the result that the Executive Branch, which is nominally vested in the person of the President, officially can not act without the consent of the Legislative Branch; that is the Congress.
In the case of matters of Supply, that is the amount of money available that the Government can spend, The Office of Management And Budget must obtain approval and consent from the Congress before monies are appropriated to it.
In Australia where the Executive Branch and Legislative Branch co-exist together, the vehicle by which the Department of Treasury obtains funds to accomplish its ends is via Appropriation Bills and other Money Bills put before the parliament and drawn on the basis of Section 83 of the constitution that:

No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law.

There is a point of note here. Even if any given money bill fails to pass the parliament which technically results in a loss of supply, the existing pieces of legislation are still in effect and since many items contained within any given Appropriation Bills are standing items which carry over from one year to the next, they will still continue to have effect until a subsequent bill has passed.
Even if a government fails to pass a budget, then that becomes a "loss of supply" and would trigger a double dissolution and an election under s.57 of the Constitution:

and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, the Governor‑General may dissolve the Senate and the House of Representatives simultaneously

The words "fails to pass" have in the past been taken to mean dithering on the part of the Senate, that is failure to pass legislation through deliberate inaction rather than direct rejection. This was further stated by the then Solicitor-General, KH Bailey in relation to the Commonwealth Bank Bill 1950 [No. 2] which failed to pass the Senate and which triggered the 19 March 1951 Double Dissolution. Following the election The Commonwealth Bank Bill was presented to Parliament again and passed both houses.

The addition of the words “fail to pass” is intended to bring the section into operation if the Senate, not approving a bill, adopts procedures designed to avert the taking of either of these definitive decisions on it. The expression “fails to pass” is clearly not the same as the neutral expression “does not pass”, which would perhaps imply mere lapse of time. “Failure to pass” seems to me to involve a suggestion of some breach of duty, some degree of fault, and to import, as a minimum, that the Senate avoids a decision on the bill.
- Sir Kenneth Hamilton Bailey, Solicitor-General, 1951

Even at the height of the Constitutional Crisis of 1975 when the Governor-General Sir John Kerr dismissed Whitlam's government and dissolved parliament, it still only dissolved parliament, there was no shutdown of government services and wouldn't have been because at bare minimum the Appropriation Act (No. 1) 1974-1975 was still in operation until a subsequent act replaced it.

Even the Department of Finance on its website points out that:
3. Departmental operating appropriations do not lapse at the end of each financial year. They remain available to be spent in the next and later financial years.

This means that unlike the United States, even if the Australian parliament were to be dissolved following a loss of supply, things like Pensions, Transfer Payments, Government Salaries etc. would continue to be paid, whether or not Parliament happens to be extant or dissolved.

I think that this highlights something a little strange about the United States' Republican form of government. The so-called system of "checks and balances" result in a greater degree of gridlock than is necessary; although we do see a great deal of bile and hubris on the floor of both our houses of parliament, not once has it nor can it result in a complete and utter shutdown of the public service as it has done to many parts of the US government.
At the time of the 1975 Constitutional Crisis, even if a stop had been put on all Reserve Bank cheques, the then the Attorney-General, Kep Enderby, had already gone to Sir John Kerr to see if a system of redeemable vouchers could be raised to be redeemed from the banks one the crisis was averted.

I received an email late this afternoon from a friend of mine who works inside the RBA (and no I'm not about to give his name away in case this is a sensitive disclosure) and he was of the opinion that the RBA would "continue to make payments and direct debits into peoples bank accounts in accordance with the existing arrangements from the previous budget no matter how long it went on for"

So in all honesty, we in Australia would never have to worry about this:
- A loss of supply on the floor on the house would trigger an election and a new budget bill once the new parliament was formed.
- A failure to pass an appropriation bill would eventually see a double dissolution as per either 1951 or 1975 and a new budget bill once the new parliament was formed.
- Crucially, the RBA would continue to make payments to people's bank accounts in accordance with the previous budget act.


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