Who Pulls the Purse Strings? Problems and Possibilities in the Legislative Oversight of Executive Expenditure in the Australian Federal Government A Dissertation Submitted for the Award LLM Master of Laws By Jessica Shaw Fitzwilliam College University of Cambridge April 2006 Table of Contents Table of Contents i Acknowledgements iii Statement on Thesis Sources iv List of figures v Introduction 1 Chapter One: Australian Parliamentary Democracy 5 Responsible Government 6 Separation of Powers 8 Federalism 9 The Combination of Responsible Government, Separation of Powers and Federalism in the Australian System 12 Chapter Two: The Senate and Access to the Public Purse 17 The Constitutional Framework 18 The Senate and Appropriations – the Nexus between Financial Control and Executive Accountability 21 Pre-Budget Scrutiny 21 Post-Budget Scrutiny 25 Evaluating the Senate's Role 26 Recent Developments 26 General Problems with the Current system 26 The October 2004 Federal Election 30 Combet v The Commonwealth 34 Conclusions 39 Chapter Three: Scotland 40 Devolution and the creation of the Scottish Parliament 41 Designing Devolution 43 The Executive 43 The Legislature 44 Benefits of the Scottish Process 51 Appropriations in Scotland 53 Pre-Budget Scrutiny 53 Post-Budget Scrutiny: The Audit Committee 58 Conclusion 58 Conclusion 61 Appendices 65 Appendix One: Examples of The Australian Federal Government's WorkChoices Advertisements 66 Bibliography 68 iii Acknowledgements I would like to thank my supervisor, Professor Cheryl Saunders, for her invaluable guidance and advice. I would also like to express my gratitude to the Clerk of the Australian Senate, Harry Evans and the many others in the Department of the Senate who have given me their support and provided me with many learning opportunities. Thanks are also due to Mr Liam Laurence-Smyth, Clerk of the Overseas Office, and Mr Bill Thompson, Director, Clerking and Reporting, for facilitating my visits to the Westminster and Scottish Parliaments respectively. I am particularly grateful to the parliamentary officers I interviewed for this dissertation, all of whom kindly gave me their time and patience. I greatly appreciated their insights and perspectives, and felt very privileged to have met and learnt from such a dedicated group of professionals. I am also very grateful to the British Study of Parliament Group for inviting me to participate in the annual 'Oxford Weekend', thereby exposing me to a variety of diverse insights and opinions about Britain's parliaments and assemblies. It was a truly enlightening and stimulating experience. I am as always indebted to my family for their enduring love and encouragement. iv STATEMENT ON DISSERTATION SOURCES The sources for this Dissertation comprise the secondary items indicated in the footnotes throughout and the bibliography found at p.67. The Dissertation is also based on practical experience in the Australian, Scottish and Westminster Parliaments, particularly field-work in the latter two Parliaments undertaken during the period Dec-Jan 2005. During my visits to the Scottish and Westminster Parliaments, I observed parliamentary and committee processes, and interviewed parliamentary officers concerning the issues and themes in this paper. Interviews were held with: Scottish Parliament Mr Bill Thomson, Director Clerking and Reporting, Scottish Parliament Mr Lee Bridges, Head of Research and Information, Scottish Parliament Mr Eugene Windsor, Clerk, Education Committee Ms Shelagh McKinlay, Clerk, Audit Committee Ms Susan Duffy, Clerk, Finance Committee British Parliament Mr Liam Laurence-Smyth, Clerk of the Overseas Office Mr John Benger, Commons Clerk of Supply Mr Dorian Gerhold, Clerk, Scrutiny Unit & Ms Gilliam Fawcett, Deputy Head of Finance Unit, Scrutiny Unit Mr Nick Wright, Clerk, Commons Committee of Public Accounts Ms Roisin Pillay & Mr Murray Hunt, Joint Committee on Human Rights Mr Ed Lock, Clerk, Lords EU Economic and Financial Affairs Committee Mr Robert Graham-Harrison, Lords Committee Office Mr Tom Healey, Clerk, Commons Modernisation Committee Mr Richard Cooke, Clerk, Commons Defence Committee Mr David Doig, Principal Clerk, Select Committees. Hand-written records of these interviews can be made available upon request. No part of this written work has been submitted for any other diploma, degree or other similar qualification at any other University or similar institution. v List of Figures Figure One: Distribution of House of Representatives Seats By State 10 Figure Two: Senate Legislation and Reference Committees and their Portfolio Responsibilities 23 Figure Three: Standing appropriations as a percentage of total government expenditure 28 Figure Four: Results of the 11 September 1997 Referendum on Scottish Devolution 43 Figure Five: Political Party Representation in the Scottish Parliament (as at 9 Nov 2005) 45 Figure Six: The Passage of Executive Bills Through the Scottish Parliament 50 Introduction "The intimate interaction between legislature and executive [is] perhaps the most central political feature of parliamentary democracy; yet this interaction has been subjected to surprisingly little systemic analysis." —Laver and Shepsle Cabinet Ministers and Parliamentary Government, 1994. Introduction 2 Introduction Mainstream Australian political discourse tends to focus on the legislative activity of the Australian Federal Parliament—the laws passed; the horse-trading involved in passage; and the personalities and political controversies that often accompany bills. The intricacies of the relationship between parliament and the executive in terms of scrutiny and accountability feature less prominently. J.S. Mill considered that the role of parliaments should be to: Watch and control the Government; to throw the light of publicity on its acts; to compel a full exposition and justification of all of them which anyone considers questionable; to censure them if found condemnable, and if the men who compose the Government abuse their trust or fulfil it in a manner which conflicts with the deliberate sense of the nation to expel them from office, and either expressly or virtually appoint their successors. This is surely ample power and security enough for the liberty of the Nation.1 The legislative function is conspicuously absent from this analysis—Mill clearly considered that the primary role of parliament was to scrutinise executive action and hold the government to account. This thesis will consider the degree to which the Australian Parliament is able to exercise the scrutiny function and hold the Australian Federal Government to account. Two distinct theoretical traditions underpin the Australian constitutional structure—responsible government and separation of powers doctrine. Both traditions concern the relationship between the different branches of government. Responsible government concentrates primarily on relations between the executive and legislative branches, whilst separation of powers doctrine concerns the tripartite distinction between the executive, legislative and judicial branches. Each theory seeks to allow the branches of government to counterbalance each other. More particularly, both theories arm the legislature with the power to scrutinise and require an account of executive action. The Australian Constitution also creates another division of power through the incorporation of federalism, creating a bicameral legislature with each chamber drawn from different constituencies, but possessing substantially coequal legislative powers. Modern parliamentary practice has evolved to reflect these doctrines in ways that were not foreseen by Australian Constitutional Convention delegates. Neither responsible government nor separation of powers doctrine operates as originally envisaged, nor does either House of the Australian Parliament function as had been intended under federalism. This is predominantly due to the rise of party discipline as the primary ordering feature of Australian parliamentary practice. 1 Mill, J.S. Considerations on Representative Government Dent (London, 1861: 1964 ed.), p. 239. Introduction 3 The failure of the Australian Houses to operate as intended has not, however, been inimical to executive accountability. Although party discipline has rendered the House of Representatives largely incapable of performing its intended function, the Senate has grown to become a particularly effective mechanism through which executive action is scrutinised, and the chamber through which the power of the legislature is most effectively wielded. The Senate's capacity in this regard is most clearly demonstrated in the appropriations process. Through the development of a strong committee system, the Senate has been able to scrutinise the executive's expenditure proposals and the general conduct of government business. It has come to occupy an integral position in the Australian constitutional framework. That position, however, is not guaranteed. There are a number of general shortcomings in the current framework, and two recent developments which pose a significant threat to the continuing ability of the parliament to effectively hold the executive to account. Threats to the parliament's role in maintaining executive accountability stem from general operational shortcomings in Senate committee practice and the executive's growing tendency to use legislative drafting techniques that remove expenditure from direct parliamentary control. Two potentially more troubling developments, however, pose a greater