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Chapter 13 - Financial legislation
Section 53 of the
Constitution
The term financial legislation refers to the two categories of proposed
laws or bills which are distinguished by section 53 of the Constitution and
which have different procedures applied to them by the provisions of that
section.
The rationale of these provisions is to
reserve to the executive government the initiative in proposing appropriations
and impositions of taxation, without affecting the substantive powers of the
Senate.
Because of the central importance of section 53 to the subject of this
chapter, it is here reproduced in full:
53. Proposed
laws appropriating revenue or moneys, or imposing taxation, shall not originate
in the Senate. But a proposed law shall not be taken to appropriate revenue or
moneys, or to impose taxation, by reason only of its containing provisions for
the imposition or appropriation of fines or other pecuniary penalties, or for
the demand or payment or appropriation of fees for licences, or fees for
services under the proposed law.
The Senate may not amend
proposed laws imposing taxation, or proposed laws appropriating revenue or
moneys for the ordinary annual services of the Government.
The Senate may not amend any
proposed law so as to increase any proposed charge or burden on the people.
The Senate may at any stage
return to the House of Representatives any proposed law which the Senate may
not amend, requesting, by message, the omission or amendment of any items or
provisions therein. And the House of Representatives may, if it thinks fit,
make any of such omissions or amendments, with or without modifications.
Except as provided in this
section, the Senate shall have equal power with the House of Representatives in
respect of all proposed laws.
Section 53 thus provides that the two Houses of the Parliament have
equal powers in relation to all proposed laws except as provided by the
section. The categories of proposed laws to which exceptions apply are proposed
laws imposing taxation and proposed laws appropriating revenue or moneys.
Section 53 provides that:
-
bills
to appropriate money or to impose taxation may not originate in the Senate
- the
Senate may not amend a bill for imposing taxation
- the
Senate may not amend a bill for appropriating money for the ordinary annual
services of the government
- the
Senate may not amend a bill so as to increase any proposed charge or burden on
the people.
The section further provides that where the Senate may not amend a
bill, it may at any stage request the House of Representatives to do so. This provision
of section 53 refers to a bill which the Senate may not amend, but has always
been interpreted as applying to a bill
which the Senate may amend where an amendment would be contrary to the
provision relating to proposed charges or burdens, the view being taken that
the section does not prevent requests in that circumstance. The provision also
refers to the Senate requesting “the omission or amendment of any items or provisions”
in a bill which is not amendable by the Senate. This has been interpreted as
not authorising a request for the insertion of a completely new item in such a
bill (ruling of Chairman of Committees, 5/5/1936, J.186). This
supposed implied limitation, however, was not observed in the early years of
the Senate (for example, in relation to the Customs Tariff (British Preference)
Bill 1906, 5/10/1906, J.190), and has
also not been observed in recent times (8/11/1985, J.570-1; 7/4/1989, J.1522-4; 22/6/1992, J.2545). As with
requests for amendments to bills which are amendable by the Senate, the view is
taken that section 53 does not prevent requests being made other than in the
circumstances listed in the section.
The provisions of section 53 are usually described as limitations on
the power of the Senate in respect of financial legislation, but they are
procedural limitations only, not substantive limitations on power, because the
Senate can reject any bill and can decline to pass any bill until it is amended
in the way the Senate requires. In particular, the distinction
between an amendment and a request is purely procedural: in one case the Senate
amends a bill itself, in the other it asks the House of Representatives to
amend the bill. In both cases the bill is returned to the House of
Representatives for its agreement with the proposed amendment. In the absence
of agreement the Senate can decline to pass the bill.
The provisions of section 53 therefore have a purely
procedural application, to determine whether amendments initiated by the Senate
should take the form of amendments made by the Senate or requests to the House
of Representatives to make amendments. The only effect of choosing a request
instead of an amendment is that a bill makes an extra journey between the
Senate and the House (see under Procedure on financial legislation, below). On
the procedural character of section 53, see the judgment of the High Court in Western Australia v Commonwealth 1995 183 CLR 373 at
482.
While appropriation
bills and bills imposing taxation may not originate in the Senate, this does
not mean that the Senate is not an equal partner with the House of
Representatives in actually making appropriations. Thus the first Senate
insisted that words be removed from the preamble of the Supply Bills 1901
implying that the granting of appropriations was the work of the House of
Representatives, and required details of items of expenditure (14/6/1901, J.36;
20/6/1901, J.42). Similarly, the Senate caused to be removed from the
Governor-General’s opening speech words implying that in the granting of
appropriations the House of Representatives had some priority (14/4/1904,
J.27).
The Senate has also exercised its right to decline to pass
appropriation bills and items in such bills until relevant information is
provided (20/5/1975, J.655-7; 28/5/1992, J.2349-50).
Section 53 contains
a qualifying clause providing that a bill is not be taken to be an
appropriation bill or to impose taxation “by reason only of
its containing provisions for the imposition or appropriation of fines or other
pecuniary penalties, or for the demand or payment or appropriation of fees for
licences, or fees for services”. Thus bills containing such provisions may
originate in the Senate and may be amended by the Senate (see ruling of President Baker, SD, 6/6/1901, p. 763). Bills
imposing fees for licences or fees for services are therefore usually treated
as amendable bills, but in recent times, having regard to
the possibility of fees being held by the High Court to be taxes, some bills
for imposing fees have been drafted as bills imposing taxation and have been
treated as such by the Senate. (Air Caledonie v Commonwealth 1988 165 CLR 462;
but see also Airservices Australia v Canadian Airlines 1999 167 ALR 392.)
Legislation which
requires appropriations or the imposition of taxation for its operation may be
introduced in the Senate with an indication that the necessary appropriation or
imposition of taxation is to be inserted into the legislation in the House of
Representatives (ruling of President Givens, SD, 10/12/1921, p. 14274; see
also Aluminium Industry Bill 1960, Blowering Water Storage Works Agreement Bill
1963, Chowilla Reservoir Agreement Bill 1963, Scholarships Bill 1967,
Compensation (Commonwealth Government Employees) Amendment Bill 1976, Liquor
Education Fund Bill 1981 and Liquor Advertising Tax Assessment Bill 1981, Plastic Bag (Minimisation of Usage)
Education Fund Bill 2002 and Plastic Bag Levy (Assessment and Collection) Bill
2002). (See Supplement)
On occasions the
Senate has made requests for the insertion of appropriation provisions in bills
originating in the House (4/10/1984, J.1153; 18/10/1995, J.3958-9; 18/6/1996, J.327). The better view, however, is that such
amendments may not be moved in the Senate at all, in that, by turning a bill
into an appropriation bill, they are contrary to the initiation provision of
the first paragraph of section 53 of the Constitution (statement by President
Calvert, SD, 16/9/2003, p. 15275).
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