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Is Blocking the Budget a Feasible Option in Contemporary Australia?

Katharine Young, Boston College Law School

[cross-posted from Online Opinion (Australia)]

The government’s bold, unpopular budget has attracted bold, popular dissent. Last week, amongst criticisms of the budget’s disproportionate impact on students, the unemployed, the poor, the sick and disabled, and the aged, Independent Andrew Wilkie announced an audacious response: that he would vote against the government’s appropriations bills, and would call on Labor, the Greens and Palmer United parties to join him. These parties could form a critical majority to block the legislation in the Senate. Wilkie’s gesture seemed to track popular opinion: an Essential poll reported that 47 per cent of voters would support a blocking of the budget bills. If successful, such an act would block the moneys needed to keep the government running after July 1, therefore forcing either a revision of the budget or an election.

Labor, however, was quick to scotch support for such a move: despite its heavy criticisms of the Abbott/Hockey budget, it reported that blocking supply would not only be anti-democratic, but would take Australia down the path of “[American] Tea Party-style politics”. It also warned that any opposition “that uses the Senate to block supply would be creating a noose for its own neck should it ever form government and not control the upper house itself.”

Putting aside the Opposition’s own pragmatic calculations, how feasible is such a move in Australia?

Let’s look first at the Tea Party analogy. In October 2013, the US Congress refused to pass an appropriations bill for the 2014 fiscal year, resulting in a sixteen-day shutdown of government services. Government employees were furloughed, government contracts suspended, and all “nonessential” government services ceased. The Republican-controlled House of Representatives, influenced by Tea Party strategists, had conditioned its support for the budget on the delaying or defunding of President Obama’s healthcare legislation. Ultimately, the threat was unsuccessful: Obama held out until the House capitulated on October 17, but not before the incurrence of substantial financial and reputational losses to the US – the shutdown was estimated, for example, to have cost between two to six billion dollars in lost output.

There are a number of big differences between Australia’s current situation and the US example. One is structural. The US presidential system lends itself particularly to budgetary gridlock: it is no surprise that the 2013 shutdown followed a long, and increasingly more frequent and serious, line of budgetary standoffs (numbering 18 since 1976). The parliamentary levers available to resolve impasse in Australia – loss-of-confidence motions, double-dissolutions or other pro-representative procedures, are simply unavailable to end the impasse between America’s President and Congress in an increasingly polarized partisan setting. As I have written elsewhere, other modern Constitutions have deliberately departed from the US model by including a constitutional default rule that automatically passes contentious budgetary legislation. And although Australia’s closest comparator, the U.K., no longer allows the Upper House to reject supply (but only delay it by one month), Australia’s Constitution contains no such rule. Structurally, our Constitution enables US style (bicameral) deadlock to occur, but with the safeguard of certain pro-representative solutions.

Another difference is contextual. The Tea Party had conditioned its support of the budget on the defunding of a separate policy item: the (already-paid for) Affordable Health Care Act. Its gesture of budgetary blackmail was therefore unrelated to the content of the budget itself. This is a pertinent contrast with the current criticisms of the appropriations bills’ direct cuts to the ABC, SBS, CSIRO and the indexation tweaks to pensions that would be stymied by the refusal of appropriations. Of course, the move to block supply is also directed to the GP fees, NewStart changes and fuel excise cuts found in enabling legislation, and Labor has announced its preference to concentrate on blocking those bills separately. The Tea Party’s single-minded campaign against Obamacare was categorically different from the budgetary politics on foot in Australia.

Next, let’s assess Labor’s cautionary statement about the precedent this would set. Would blocking the budget embolden a renegade Senate against future budgets? This assessment depends upon how secure the convention is currently, that the Senate does not vote to block supply. Certainly, there is constitutional text – section 53 – to support the Senate’s power to block supply. It was famously – and notoriously – used by the Coalition-controlled Senate to block Whitlam’s budget in 1975, leading to his dismissal by Governor-General Kerr and the election of Malcolm Fraser. The political fallout from that dramatic crisis still echoes. The late constitutional scholar George Winterton described the blocking of supply as “political insanity” for modern Australia. In short, voters are unlikely to respond favorably to such a drastic option. Neither incumbents nor opposition members would be eager to test the public’s verdict, save in highly charged moments of budgetary dissent. It is unlikely, despite widespread criticism of the budget, that we are at that point now.

Hence, the option may not be politically viable, although it appears both constitutional and even democratic. The Australian Constitution was designed to be less tolerant of deadlock than the US Constitution. Parliamentary procedures exist to return impasse to the people. In Australia’s case, party discipline, political calculations, and the long shadow of 1975 all make the refusal of supply a somewhat feasible, but very unlikely, option.

[This post adapted from American Exceptionalism and Government Shutdowns: A Comparative Constitutional Reflections on the 2013 Lapse in Appropriations, 94 Boston University Law Review (forthcoming 2014).]

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Published on June 28, 2014
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5 Responses

  1. Tom Ginsburg

    Katie, thank you for bringing this to our attention. The Tea Party analogy is really interesting. One irony is that the Tea Party is basically pro-austerity, whereas the Australians using the tactic are anti-austerity. In this sense, the Tea Party threat was not divorced from the contents of the budget–they really do want to (selectively) limit government spending. Obamacare was just the hook.

    • Katie Young

      That’s a great irony to point out Tom. One thing that U.S. experience with since 1976 has shown is that, despite the fact that both Republicans and Democrats have sought to block appropriations bills, the more noteworthy standoffs have occurred when Republicans were in control of at least one legislative chamber. This partisan tilt is precisely what we would expect – those blocking the budget face a lower political cost from their constituents when their ideology is “pro-austerity” or anti-spending. This tilt obviously gives anti-spending parties – and anti-spending factions like the Tea Party – a negotiating advantage in budget standoffs. The Australian example is interesting because the independent legislator who proposed blocking supply rationalized the case on pro-spending grounds.

  2. P. Y. Lo

    A handful of Hong Kong’s legislators have attempted to block the budget from being approved by the Legislative Council for a succession of two years. Their cause was to force the Hong Kong Government to consider a retirement benefit scheme to cover the whole of the population in Hong Kong. Much time was or considered to have been wasted. On both occasions, the deadlock was broken by the President of the Legislative Council making use of a residual provision in the Rules of Procedure of the Legislative Council to organise and then terminate the debates so that the couple of thousands of proposed amendments to the budget proposed by these radical legislators would be voted down before the Appropriation Bill as a whole could be approved.

    The President has felt that it is not appropriate for him to apply this broadly worded residual provision, which simply says that “[in] any matter not provided for in these Rules of Procedure, the practice and procedure to be followed in the Council shall be such as may be decided by the President who may, if he thinks fit, be guided by the practice and procedure of other legislatures”. The Legislative Council itself should make appropriate rules to regulate its debates. However, no consensus can be reached on the amendments to the rules. Maybe some legislators are content with the President drawing as much power as his imagination can from this provision.

    The recent flashpoint has been in the Finance Committee of the Legislative Council which approves specific appropriations. On Friday, 27 June 2014, the Chairman of the Finance Committee put to a vote a much debated item while more than one-third of the legislators were on their feet around him arguing over matters of procedure and the vote was announced approving the item without recording those legislators having voted. The “non-participating” legislators are contemplating a judicial review of the Finance Committee’s decision, saying that since the debates and the vote had not been in accordance with the relevant rules of procedure of the Finance Committee, the decision was invalid and the court should therefore set it aside. We shall see whether the court in Hong Kong, which has traditionally respected the autonomy of the legislature, would intervene. But one suspects that cases of the Supreme Court of Israel would be cited.

    • P Y Lo

      Some additional words about the Hong Kong political context.

      Hong Kong’s Government is not based upon party politics. Its government ministers are nominated by the Chief Executive and appointed by the Central People’s Government in Beijing. And the Chief Executive himself is elected by a committee of 1,200 “worthies” (as the Economist calls them) of Hong Kong residents with a bias towards the commerce, industry and finance sectors.

      Party politics is mainly the play in the elected Legislative Council, even though only just more than half of its members are returned by popular voting on the basis of geographical constituencies. While the Chief Executive can handpick some persons with party political affiliation to become ministers, these persons are supposed to resign their party political positions and become so-called “political neutral” when appointed as ministers. Hence the Government, which formulates policies and introduces the budget, is not expected to be a product of party politics in democratic elections. Accordingly, legislators in Hong Kong do not have to exercise the caution the Labor Party in Australia has. They are confined to oppose the Government and be seen to do so, be it responsibly or irresponsibly.

    • Katie Young

      Thanks for this note. The residual provision you mention presents quite a number of options in the context of budgetary standoffs: a presidential discretion to apply comparative practices and procedures has an array of rules to look to. The three frames I used in my paper to present the comparative options – default budgetary passage, pro-representative solutions, or plain old political compromise – would clearly play out very differently in the Hong Kong legislature.

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