Labor and the Democrats are out of constitutional order.
Their plan to knock back the proposed pharmaceutical benefits, superannuation and disability changes breach the intent of the Constitution, just as the Coalition’s abuse of its Senate numbers in 1975 breached the Constitution’s intent.
Perhaps this is the more important fall-out of the Budget than the superb media management of it or that it possibly indicates John Howard wants to stay around for a while.
(The media management was to leak out the nasties – the PSB hike and the disability pension revamp – so when the journalists were herded into the Budget lock-up they would look for something new. They found it — the domestic security hype, and they plastered it over Page One and the TV headlines. The Budget was mostly benign, which is unusual for a first-year-of-the-term Budget, when government want to get the nasties away. Perhaps Howard does not want early nasties because it might sound in the polls, making the back-benchers restless about his leadership.)
But back to the constitutional questions.
Our Constitution was drafted before the 1909-1911 stand-off between the House of Lords and the Commons in Britain. Before then it was unthinkable that the Lords would defeat a Budget or money measure put up by an elected Government. But in 1909 the Liberals put up a property tax which enraged the Conservatives. They unsuccessfully opposed in the House but they used their majority in the Lords to knock it back. Two elections were held in 1910 over the tax and the Liberals won both. In emboldened the Liberals to propose reform of the House of Lords in 1911 which would cut their power to merely being able to delay Bills (of any kind), not reject them. The Liberal Government threatened to create enough lords to swamp the Conservative majority unless the House of Lords agreed to the change. The lords reluctantly succumbed.
In that context, it was plain that under our Constitution drafted in the 1890s that our Upper House would never block money bills like the Lords. But as it was to be a powerful states’ house on the legislative front some codification of its power was needed. It was to have equal legislative power as the House of Representatives – to originate legislation and to amend or knock back legislative proposals from the House of Representatives. But its power to muck about with money matters was severely curtailed in a scheme set out in Sections 53 to 56. That scheme said the Senate could not originate any money bills (though fines and fees in other legislation was exempted). Nor could the Senate (ital) amend (ital) any money Bills. In return the House was required to separate money, tax, excise and customs Bills and not tack on other legislative matters to sneak them through under the guise of an unamendable money Bill, as had happened in the US.
The scheme of it was obvious – the Government of the day, formed in the House should be allowed to finance governance of the country.
Enter the constitutional lawyers. A prohibition on amending legislation was not a prohibition on rejecting it outright, they have ruled. It’s a bit like having a heritage rule that says you cannot alter an historic house and lawyers saying that means you can knock the house down. Absurd. And now we live with the consequences.
If our Constitution has been drafted after 1911, the drafters would have been alert to the possibility of an Upper House rejecting money bills and would have made it absolutely clear that it could not – rather than just assuming it. They were alert to the US practice of tacking and met it squarely.
The power of the Senate is one of the most destabilising elements of our federation. The conventions that it should not knock back appropriation for the ordinary services of government were breached in 1975. That convention seems to have been restored in the past quarter century, but the general veniality of party politics means that circumstances could easily arise again when a Senate forces a government to an election. There does not seem to be a convention that money measures will pass. There should be. NSW has made that change in its Constitution.
The federal Constitution is broke on this. It should be fixed. And so should the capacity of the Senate to block a Government’s legislative program no matter how many times a Government gets re-elected on that platform, unless the Government goes through the disruptive process of a double dissolution. Double dissolutions are more disruptive than ordinary elections because after them senators’ terms are dated from the previous July (instead of the next July). This usually results in the need for a shorter-than-usual term for the House if the subsequent election is to be held simultaneously. Moreover, a double dissolution means 12 senators are elected from each state instead of six, which usually results in an over-representation of minor parties.
It is difficult, though, to imagine the Senate agreeing to any change without some commensurate reduction in the power of the Executive Government.
After 1975 it was always the aggrieved Labor party that wanted a change to the Senate’s power, and the Liberals resisted. But the Liberals but be goaded into supporting change if Labor is silly enough to push ahead with its blocking of key tax measures and measures that the Government has gone to the people with again and again in fine legislative detail.
You could get a trade-off. The Senate loses its power to block money Bills potentially sending the House of Representatives to an election and in return the Government loses its power to call a double dissolution, thus sending the Senate to an early election. The Government loses its power to set election dates and the terms are fixed (as in the US). In return, if the Senate rejects legislation, that legislation could be taken directly to the people at the next election either as a referendum or be allowed through after the election on the say-so of the lower house only.
The Senate would still have its formidable investigative powers and still review legislation highlighting weakness to the public and the Government. It could only delay legislation until the next election, or indefinitely if there is a change of Government, but we would end these damaging stand-offs which threaten the stability of the Government or its capacity to run the finances of the nation responsibly.