David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

I rise to speak to the various Appropriation Bills before the Senate. I know the major parties support their passage, but I have grave concerns about these annual Appropriation Bills that I want to put on the record. As we have just heard from Senator Wong, Commonwealth spending is at record levels. Figures for last financial year indicate that real Commonwealth government spending per person is at its highest level on record. Real government spending per person across the federation is also at its highest level on record. There is no hiding the rise of government spending, even when you compare government spending with GDP. Commonwealth government spending is 25.9 per cent of GDP—that, by my calculations, is actually higher than Senator Wong thinks at 25.8. Since 1970, this ratio of Commonwealth government spending to GDP was higher for just four years under Bob Hawke, for two years under Keating and for one year under Rudd. In all other years since 1970, Commonwealth government spending relative to GDP was lower than it is today.

There is no justification for the ever-expanding Commonwealth government spend. As I have said before, living standards for all groups of society have risen inexorably over the past decades. This means the need for government welfare services has declined, and we have not uncovered new forms of effective government intervention, either. To the contrary, the prosperity-promoting effects of free markets and the many failings of government involvement have been demonstrated time and again.

The annual Appropriation Bills authorise Commonwealth government spending. They provide line-by-line authorisation for spending on specific items. They also set limits for some general categories of spending. The Senate is empowered by the Constitution to reject any appropriation bill. This reminds us that Senate scrutiny into appropriation bills does not represent sticking our noses into other people's business. Indeed, the Senate has a responsibility to scrutinise. The Senate is also empowered by the Constitution to amend any provision in the Appropriation Bills that does not relate to the 'ordinary annual services of Government'. That means the Senate can amend any provision relating to loans, capital equipment, assets and depreciation, any provision relating to grants to the states and territories and any provision relating to new policies.

So the Senate has a particular responsibility to scrutinise capital spending, grants to the states and spending on new policies. This leads me to the first of my grave concerns. The government is asserting that the Senate cannot amend provisions relating to new policies. The government is doing this by placing provisions relating to various new policies in those Appropriation Bills that should exclusively house provisions relating to the 'ordinary annual services of Government'. These are the odd-numbered Appropriation Bills, like the no. (1) and no. (5) bills before us today. For example, the no. (1) bill includes provisions for Australia's contributions to the Asia Pacific Project Preparation Facility and to the World Bank's Global Infrastructure Facility. These are new policies, but because they fall under an existing, broad departmental outcome, the government is asserting that they represent the 'ordinary annual services of Government' and are immune from Senate amendment. I reject this assertion and reserve the right to amend provisions relating to new programs and projects, even if the government places these provisions in odd-numbered appropriation bills.

Another grave concern relates to the even-numbered Appropriation Bills. These are the bills that should contain all the provisions that the Senate is empowered to amend, including grants to the states under section 96 of the Constitution. Section 96 of the Constitution provides:

… the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

This is a very strong power provided to the parliament, but Appropriation Bill (No. 2) before us today contains a clause, clause 16, that delegates this power to the relevant minister. In particular, it provides the minister with the power to determine the amounts and timings of payments to the state, territory and local governments. It also provides the minister with the power to determine the conditions under which those payments are made. The government asserts that these payments to the states and territories can be made without a written determination from the minister; and the government asserts that, if there is a written determination, the determination may not be made public and it will not be disallowable by the parliament. It is bad enough that the Commonwealth uses section 96 of the Constitution to undermine the Federation; it is unforgivable that this could occur at the whim of a minister, without parliamentary scrutiny. This is a centralisation of power that would put the Soviet Union to shame.

My final grave concern relates to the massive blank cheques provided in the appropriation bills. Take, for example, the issue of national partnership payments. These are payments of tied grants to the states and territories that are authorised under the Federal Financial Relations Act 2009 so they do not need to be individually specified in annual appropriation bills. However, the annual appropriation bills need to set a limit on the total amount of national partnership payments in a year. The budget papers outline government plans for $10.6 billion of national partnership payments next financial year, but Appropriation Bill (No. 2) sets a limit of $25 billion on national partnership payments next year. This represents a $14.4 billion blank cheque. It will allow the government to make national partnership payments that it has not outlined in any document.

Such a blank cheque is completely unnecessary. For instance, if the government increased its planned national partnership payments in later months, it would be able to outline these increased payments in updates to the portfolio budget statements and to seek authority for a higher spending limit in follow-up appropriation bills, which are routine. That the government seeks authority for national partnership payments without even outlining them in budget documents is the height of authoritarian swagger.

I have a simple amendment to Appropriation Bill (No. 2) to reduce the authority for national partnership payments next year from $25 billion to $11 billion. This is still well above the planned level of national partnership payments. This is the most modest of amendments. It is an amendment to a bill that the Senate is clearly empowered to amend and it is an amendment that defends the limited rights of the parliament. So, if any senator opposes this amendment, I would appreciate an explanation in the committee stage as to why.

I have outlined three grave concerns with the appropriation bills before the Senate, but these are not the paranoid concerns of a solo libertarian. The first two concerns arose from the Senate Scrutiny of Bills Committee, a cross-party committee of which I am not a member. The third concern arose from the Parliamentary Library's briefings on the budget. Most senators do not take the time to personally scrutinise these bills. Surely that means it is our responsibility to listen to those people who do take the time—that is, the senators on the Scrutiny of Bills Committee and the parliamentary officers who prepare their committee reports and undertake research at the Parliamentary Library.

These five appropriation bills before the Senate have more than $97 billion of specific spending proposals in their schedules and spending limits applying to general spending areas in excess of $30 billion. Even if you do not share my concerns about the magnitude of government spending, there is a case for applying more scrutiny to these bills than to other bills that pass through this place. Unfortunately, there is far less scrutiny of these bills.

I believe it is a dereliction of duty to let government spending drift; but, through a failure to scrutinise these appropriation bills, that is exactly what this parliament is doing.