Catallaxy Files

From time to time we see various proposals relating to independent fiscal authorities or committees to set tax rates and so on. Nick Gruen has been proposing the independent fiscal authority idea for a long time (since, at least, the late 1990s) while this week Ross Garnaut proposed an independent commission to set carbon tax rates. Just yesterday there was an important debate in the House of Representatives that reflects on this issue. (Hansard here – this link will break soon). If you read through the Hansard you’ll see the debate includes references to the English civil war (one of them anyway) and also the Glorious Revolution of 1688. Chris Pyne, I think, has confused the two events to some extent – but he’s got the right idea. The person to pay attention to though is Anthony Albanese – he sets out the position quite well.

Thank you, Mr Speaker. The Constitution and the House of Representatives Practice are very clear. The Constitution enshrines very clearly under sections 53 and 56 the way that money bills come before the House. Section 53 says:

Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate.

That is a section of the Constitution that from time to time people in the Senate have expressed a different view on. It is understandable that from time to time people will try to increase the importance of the chamber in which they reside, but that is not a principle that has ever been supported by the House of Representatives and neither should it be. Section 56 of the Constitution reinforces section 53. It says:

A vote, resolution, or proposed law for the appropriation of revenue or moneys shall not be passed unless the purpose of the appropriation has in the same session been recommended by message of the Governor-General to the House in which the proposal originated.

It is very clear that there is no message from the Governor-General with this legislation. It is quite clear from the speeches of the member for Mackellar and others that this bill, were it to be passed, would indeed require additional moneys to be expended. The financial initiative of the executive is enshrined not only in the Constitution but also in the House of Representatives Practice and standing orders. House of Representatives Practice has been used in this chamber since this chamber was formed. Page 408 very clearly outlines the financial initiative of the executive:

 The Executive Government is charged with the management of revenue and with payments for the public service.
 It is a long established and strictly observed rule which expresses a principle of the highest constitutional importance that no public charge can be incurred except on the initiative of the Executive Government.
 The Executive Government demands money, the House grants it, but the House does not vote money unless required by the Government …

It is there in the House of Representatives Practice in black and white for all to see, and the Manager of Opposition Business knows this to be the case. Page 431 of Practice goes on to deal with section 53 of the Constitution and the limitations on the Senate powers of amendment. Further, page 567 of House of Representatives Practice says:

A private Member may not initiate a bill imposing or varying a tax or requiring the appropriation of revenue or moneys. This would be contrary to the constitutional and parliamentary principle of the financial initiative of the Executive—that is, that no public charge can be incurred except on the initiative of the Government.

So it makes it very clear. Page 568 of Practice says this:

It would not be possible for a private Member to obtain the Governor-General’s recommendation for an appropriation. Furthermore, of those bills requiring a Governor-General’s message, only those brought in by a Minister may be introduced and proceeded with before the message is announced.

It goes on to say:

Therefore, only a Minister may bring in a bill which appropriates public moneys.

It could not be clearer. Standing order 179(a) is also very clear:

Only a Minister may initiate a proposal to impose, increase,
or decrease a tax or duty, or change the scope of any charge.

There is no possibility that those who have moved opportunistically to dissent from your ruling, Mr Speaker, can argue that this does not change the scope of the charge. There is no possibility that they can argue that. They know that that is the case, and they know that their position is contradictory to the standing orders and to House of Representatives Practice. Standing orders 179(b) and (c) say:

(b) Only a Minister may move an amendment to the proposal which increases or extends the scope of the charge proposed beyond the total already existing under any Act of Parliament.
(c) A Member who is not a Minister may move an amendment to the proposal which does not increase or extend the scope of the charge proposed beyond the total already existing under any Act of Parliament.

So we have a very clear position here which is backed up by the Constitution, the House of Representatives Practice and the standing orders. Indeed, when this issue raised its head at the end of last year in this new parliament, the Member for Opposition Business made it clear in public interviews that he understood that only a minister can introduce a money bill. On a number of occasions, the Manager of Opposition Business and other senior members of the opposition have stated that their intention in raising these issues is to get the government to adopt them. They say that in recognition that only a government minister can introduce money bills into this House and only with a message from the Governor-General.
I say to you, Mr Speaker, that your ruling is absolutely correct today. This House has continually reaffirmed this principle, without exception. The House has done so because the founding fathers—and they were all men—were very wise when they wrote the Constitution and put in place provisions that have served this nation well for 111 years. These provisions ensure that when expenditures are approved people know where the money is actually coming from. You cannot have one-off bills not considered as part of the executive government because if you had that there would a range of expenditures which, by themselves, every member of this House would support. Who would not support, in isolation, the concept of giving more money to the homeless or the disadvantaged? Unless it is viewed in the context of a budget, which is the role of the executive government, you simply cannot have a responsible government that puts in place appropriate economic management in the interests of this nation.

I get the impression that not everyone accepts that position. Tony Windsor suggesting

… maybe at some stage the House has to pass some sort of appropriation bill, for $1, so that it can be tested in the courts for future reference. By that time, the hung parliament will probably be well over and done with.

Overall, however, Albanese is very clear and certain about exactly who has the power to introduce taxation legislation and the process whereby it can be introduced. That suggests that any mechanisms to automate taxation or render it subject to an ‘independent’ body of some sort would fall foul of the constitution and Parliamentary rules. In the first instance those independent bodies would have no power to direct the governor-general to support taxation legislation. Similarly, there is no reason why Parliament would grant an external body the power to direct the executive to introduce taxation law, when it itself cannot direct the executive to introduce taxation legislation.