Chapter 13 - Financial legislation
History of
expenditure scrutiny
The history of these procedures is of interest. Prior to 1961, the only
opportunities for the Senate to consider the estimates were the debate on the
budget papers, the second reading debate and the committee of the whole stage
on the appropriation bills. This system was unsatisfactory because the
appropriation bills were often received late in the period of sittings and
insufficient time remained for their consideration. This led to the adoption of
a new procedure in 1961.
From 1961 the
practice was adopted of considering the estimates (that is, the figures
contained in the appropriation bills, as distinct from the bills themselves) in
committee of the whole prior to the
receipt of the appropriation bills. This system had the advantage of allowing
more time for the consideration of the estimates earlier in the period of
sittings. The unsatisfactory features of this procedure were that the
consideration of the estimates engaged the whole Senate for a considerable
period of time, and questions could be put only to ministers in the Senate, who
mostly repeated answers provided to them by departmental advisers. These
disadvantages were partly the cause of the Senate moving to the consideration
of estimates in estimates committees in 1970.
In 1970, as part of the establishment of a comprehensive committee
system which had been recommended by the Standing Orders Committee, estimates committees
were established to examine the estimates in detail (see also Chapter 16,
Committees). The estimates committees were intended to achieve the advantage of
more expeditious consideration of the estimates, in that three estimates committees
could meet simultaneously. An additional advantage was that questions could be
put directly to departmental officers, subject to the right of ministers to
answer questions themselves. The committees were also established with the
intention that largely they would replace the committee of the whole
proceedings. An explanatory note circulated in June 1970 with the motion to
establish the committees stated:
The reasonable expectation would be
that, the Estimates having been examined by the Estimates Committees, the
Senate would generally only consider any matters in respect of which further
consideration had been recommended by the Committees.
The next major change in procedures was the adoption in December 1989
of a recommendation of the Select Committee on
Legislation Procedures, which considered the estimates procedures in
conjunction with its consideration of procedures for referring bills to
committees (see also Chapter 12, Legislation, under Procedures for regular
referral to committees). The select committee recommended that debate in
committee of the whole on appropriation bills be confined to matters in respect
of which estimates committee reports or reservations attached to the reports
had made recommendations that the Senate further consider those matters.
The reason for this recommendation was that the committee of the whole
stage on appropriation bills, which was intended to be largely replaced by estimates
committee examination of the estimates, had in fact expanded into a full-scale
reconsideration of the detail of the bills. As was pointed out by the then
Deputy President, Senator David Hamer, in debate on the select committee report
(SD, 4/12/1989, p. 3814), after the estimates committees were established in
1970 there was a large reduction in the time spent in committee of the whole on
the appropriation bills, but that time had increased over the years until, in
1989, 33 hours were spent in committee of the whole on the bills. The
recommendation of the select committee was intended to achieve the original
purpose of the estimates committees of largely replacing the committee of the
whole consideration of the bills, and focussing any debate in committee of the whole
on matters which were raised in estimates committees and which were considered
to require some further examination.
By the end of 1992, however, it was already clear that the adoption of
the new procedures in December 1989 had not achieved its purpose. In 1990
nearly 20 hours were spent on the additional appropriation bills and over 37
hours on the annual appropriation bills in committee of the whole. In 1991 over
24 hours were spent in committee of the whole on the additional appropriation
bills and 30 hours on the annual appropriation bills. There had not been a return
to the original purpose of estimates committees of replacing committee of the
whole consideration of the estimates. This was because a great many matters
were recommended for further consideration by estimates committee reports or
reservations attached to the reports. The 1989 procedures did not place any
limitation on the number of matters which could be recommended for further
consideration, and, as was pointed out by the Chair of Committees in relation
to the annual estimates in 1990, many of the matters were very broad and did
not relate to specific programs or items of expenditure (SD, 12 and 13/11/1990,
pp 3893-7, 4036). In the 1991 reports and reservations, matters recommended
for further consideration were more specific, but a great many matters were
specified.
The fundamental difficulty with the various changes of procedures which
had occurred over the years was that they provided more opportunities for the
consideration of the estimates and the appropriation bills, and the
consideration of the estimates and the bills had expanded to take up all of the
available opportunities.
Originally there were only the second reading and committee of the
whole stages of the appropriation bills in addition to debate on the budget
papers. Thus there were three opportunities to consider the estimates, one of
which was in committee. There were by 1992 four opportunities to consider the
estimates, two of which allowed detailed consideration in committee:
(a) the
debate on the budget papers (this debate is usually not extensive and is often
not completed);
(b) consideration
of the estimates in estimates committees;
(c) the
second reading debate on the appropriation bills; and
(d) the
committee of the whole stage of the appropriation bills.
The stages listed in (b), (c) and (d) had expanded into full-scale
considerations of the estimates and the appropriation bills. The original
intention of the establishment of the estimates committees, that they would
largely replace the committee of the whole stage on the bills, had still not
been realised. In effect, there were two opportunities to consider the
estimates in committee, with each senator able to speak any number of times,
when it was originally intended that there be only one such detailed
consideration.
In 1992 the Procedure
Committee considered ways of returning to the original purpose of estimates committees,
and preventing the continuing expansion of consideration of the estimates so
that it took up more and more of the time available for the consideration of
legislation.
The Procedure Committee proposed that, as a substitute for the committee of the
whole, supplementary hearings of estimates committees be held. (Procedure
Committee, Discussion Paper, Estimates Committees and Appropriation Bills,
December 1991; First Report of 1992, PP 527/1992, March 1992.)
This proposal was adopted by special orders agreed to on 6 May 1993 (J.99) and incorporated
into standing order 26 in February
1997. The procedures required that, after the initial round of hearings of
committees, written answers to questions and further information provided by
departments were to be lodged with the committees in accordance with a deadline
fixed by the committees. Senators were to lodge with the committees notice of
specific matters which they wished to be further examined in the committees,
and of matters arising from the written answers and the additional information
which they wished to raise (these notices replaced the matters recommended for
further consideration in committee of the whole in the estimates committee
reports and the reservations attached to the reports under the 1989
procedures). The committees then met after the written answers and additional
information had been provided, and held supplementary hearings on the matters
notified by Senators for further examination. The responsible ministers were
notified in advance of the particular matters to be raised at the hearings, and
asked to provide the officers with responsibility for those matters. The
hearings were to be held outside the Senate’s sitting times, but the sittings
of the Senate could be suspended to allow the hearings to take place if the
Senate’s program of business allowed. The committees decided the times of the
hearings and how long they would last. The committees were to coordinate their
supplementary meetings, just as their main meetings were coordinated.
Apart from avoiding long committee of the whole proceedings, and
achieving the original purpose of the establishment of the estimates committees,
these procedures had a number of advantages:
- a more satisfactory and systematic means is provided of dealing with matters
arising from the initial hearings of the committees
-
in
particular, questions arising from written answers and additional information
are put directly to officers
- answers
to questions on notice and additional information are supplied more
expeditiously and perhaps are more carefully composed
- officers
do not need to attend on the committee of the whole stage, the progress of
which is much more uncertain than that of the committees
-
there
is less pressure on the committees to conclude their main meetings by a
deadline.
In 1994, as part of
a restructuring of the committee system recommended by the Procedure
Committee (see Chapter 16, Committees), the function of scrutinising estimates
was transferred to the legislative and general purpose standing committees.
These committees examine the estimates in the same way as the estimates committees.
In 2001, on the
recommendation of the Procedure Committee, supplementary hearings were confined
to the annual appropriation bills, and abolished in respect of the additional
appropriation bills. The rationale of this change was that, as the budget cycle
had developed, the supplementary hearings for the additional appropriation
bills were occurring very near to the main round of the annual appropriation
hearings, when unlimited questioning of departments and agencies is possible.
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