Crikey readers talk budget legislation and why we should continue to tax earnings in retirement.
Lack of planning leads to an unsustainable future
Alan Bartlett writes: Re. “Why we should continue to tax earnings into retirement” (Friday). After World War II the Chifley government introduced a social security tax to pay for social security, including old age pensions for Australians. The Menzies government with all the foresight and wisdom typical of the Liberal Party abolished the tax and disbursed the funds into general revenue. Had the money been set aside and invested (a future fund?) as intended, we wouldn’t have the spectre of an unfunded liability for pensions as we see today.
Similarly, the Abbott government plans to let overseas investors reap the profits of the minerals boom rather than the people of Australia just when the money would be starting to roll in.
Neutering the NBN, scrapping the market-driven carbon pricing scheme, unsustainability writ large — all to satisfy an over-inflated ego. Tony Windsor had the current PM summed up in 2010 but unfortunately too few others could see it.
While it may be the convention that the Senate passes the Appropriation Bill (No. 1), the Senate is by no means obliged as a matter of constitutional law to do so. The limitation in section 53 speaks only the ability, or rather otherwise, on the Senate amending proposed laws for the ordinary annual services of government, to which the Appropriation Bill (No. 1) relates. Otherwise, s. 53 is explicit in its last paragraph: “Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws.” This, therefore, includes the power to reject appropriation and taxation bills.
This is the interpretation arising out of the Federation Debates, and confirmed by Quick and Garran at page 673, and following sources. Speaking as a lawyer who practises in constitutional law, I would hate for Crikey to be publishing something that is constitutionally incorrect! I trust this assists. It may be useful to refer to the article written by a colleague of mine Adam Webster in The Conversation on this topic.
Stephen Bartos responds: Yes, your correspondent is correct. I was guilty of oversimplifying. The Senate cannot amend but can reject. And as Odgers Senate Practice notes (p 345): “They are procedural limitations, not substantive limitations on power, because the Senate can reject any bill and can decline to pass any bill until it is amended ….”.
It is, however, a complex area: a House Standing Committee on Legal and Constitutional Affairs inquiry on this section of the constitution commented on its difficulty. I believe the practical effect of s53 is that the Senate has to pass a bill for ordinary annual services, not reject it. My understanding of Westminster conventions (noting that several Westminster system countries do not have a written constitution and practices diverge considerably) is that a rejection would probably require the Prime Minister to resign and call a fresh election. This is a grey area, it is convention, not law; other than the special circumstances of 1975 it has not been tested in Australia.
But in any case, without a valid appropriation departmental expenses would have no authority, public servants could not be paid, government would grind to a halt. I don’t think the Senate would ever be prepared to go this far. So in practical terms the effect of the clause is to make it obligatory for the Senate to pass supply.