Chapter 13 - Financial legislation
Terminology
Proceedings in the
Senate in relation to financial
legislation are often discussed without regard to the terms of section 53 and
with the use of terms such as “supply” and “money bills”,
which confuses the discussion. There has also always been considerable
confusion about the processes by which the Parliament appropriates money for
the operations of government and the terminology applying to those processes.
The word “supply” has come to be used for virtually any appropriation of money,
and any rejection or amendment by the Senate of any appropriation bill, or even
any bill having any financial content, is liable to be referred to as “blocking
supply”.
In order to clear up the confusion it is necessary first to clarify the
terminology. Strictly speaking, supply was the money granted by the Parliament
in the supply bills which, before the change in the budget cycle in 1994, were
usually passed in April-May of each year, and which appropriated funds for the
period between the end of the financial year on 30 June and the passage of
the main annual appropriation bills. The latter appropriate funds for the whole
financial year, were formerly passed in October-November and are now passed in June. The term “supply”
may be loosely applied to all of the annual appropriation bills, that is, the
main annual appropriation bills, the additional appropriation bills and any
supply bills, since those bills together annually provide the funds necessary
for government to operate. It is not legitimate to apply the term to any other
appropriation bills, or to the revenue raising measures properly called tax
bills.
The term “money
bills” may be used to refer to all bills which appropriate money. This includes
not only the annual appropriation bills, which consist of the main
appropriation bills and the additional appropriation bills, but also any other
bills which appropriate money. There are many bills which appropriate money for
particular purposes, and, in many of these, the appropriation is continuing and
does not have to be renewed annually. Under section 53 of the Constitution
bills which appropriate money may not originate in the Senate, and it is
therefore legitimate to use the term “money bills” to refer to all such bills.
The term “money bills” is also used, however, to refer only to that category of
appropriation bills which under section 53 may not be amended by the
Senate, that is, bills which appropriate money for the ordinary annual services
of the government. Not all appropriation bills fall into this category. The
term “money bills” is also used to include bills which impose taxation, which
may not originate in the Senate. Such bills, however, are more properly called
tax bills.
The term “tax bills” should
properly be confined to bills which impose taxation and which, under section 53
of the Constitution, may not originate in the Senate and may not be amended by
the Senate. Under section 55 of
the Constitution, laws imposing taxation must deal only with one subject of
taxation, and must deal only with the imposition of taxation (this provision
also is further outlined below). Provisions dealing
with the assessment and collection of taxation are contained in separate bills,
and such bills should not be referred to as “tax bills”. A proper term for them
would be “tax assessment and collection bills”.
The term “budget
measures” is used to refer to all bills which put into effect the financial
measures proposed in the Treasurer’s budget speech. The term covers not only
the main annual appropriation bills and any bills containing increases in
taxation proposed in the speech, but bills making minor adjustments to
appropriations, taxes or government outlays. Thus the only distinguishing
characteristic of “budget measures” is that they have been proposed in the
budget speech. It is not, therefore, a useful category of bills: it does not
indicate the importance of the bills, and bills appropriating money, imposing
taxation or carrying out other
financial measures, including bills of great importance, may not be budget
measures simply because they were not referred to in the budget speech.
The conceptual confusion surrounding these categories of bills occurs
because these terms are used as if they were interchangeable without any regard
to the distinction between them. The terms are also used to include all bills
which refer to financial matters or which have some financial implications.
This category virtually includes all bills presented, because every piece of
proposed legislation has some financial implications.
Appropriation bills and tax bills are the only useful categories of
bills because they are the only categories which are given special treatment by
the Constitution. All other bills are treated alike and the Houses have equal
powers in relation to them.
The two useful
categories of bills are distinguished by their defining characteristics. Money
bills, which should properly be called appropriation bills, are those bills
which contain clauses which state that money, of specified or indefinite
amount, is appropriated for the purposes of the bills. A bill which does not
have such a clause is not an appropriation bill. A tax bill is a
bill which contains a clause which provides that tax is imposed upon a
specified subject, either by setting a new tax or raising the level of an
existing tax. A bill which does not contain such a clause is not a tax bill.
Another concept
which is sometimes used in discussion is that of “measures vital to government”
or “measures vital to the survival of a government”. The bills which may be
regarded as falling into this category are:
(a) the
annual and additional appropriation bills and any supply bills (without which
government would not be able to continue to fund its various services); and
(b) tax
bills which impose income tax (without which there would be insufficient
revenue to appropriate in the appropriation and supply bills).
If any of these bills were not passed by the Parliament the government
would not be able to continue to function. The failure to pass other bills,
however, would not in normal circumstances prevent the continuing operations of
government.
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