Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

As I have indicated to the opposition, I intend to make some brief remarks on the second reading of this bill. To save time, I have flagged with the opposition and with Senator Milne that I intend to respond briefly to the amendments which have been foreshadowed by either party.

The Financial Framework Legislation Amendment Bill (No. 3) 2012 responds to the decision handed down by the High Court on 20 June 2012 in the matter of Williams v Commonwealth, a decision which represents a significant shift in the balance of power between the parliament and the executive. For over 100 years, governments of all political persuasions have understood that the executive could rely on the executive power of the Commonwealth to spend money on programs without the need for legislative authority. However, in the Williams case the High Court determined the executive cannot spend money on programs unless they are supported by legislation, regardless of the value of the programs.

The bill before the Senate responds to this new operating environment. It will amend the Financial Management and Accountability Act to establish clear legislative authority for the Commonwealth to make payments in relation to particular programs, grants and arrangements. Transitional provisions in the bill protect programs, grants and arrangements in place before the bill commences.

It is vitally important that recipients of Commonwealth grants and other payments who act in good faith consistent with the arrangements under which those payments are made not be left in doubt about the validity of payments. The government has been careful to identify grants and programs where a question might be raised about the need for legislative authority.

As the Senate will see from the schedule before the chamber, the types of programs that we are talking about are clear. This bill provides spending certainty across various government programs including Indigenous broadcasting, support for carers, National Immunisation Program, infrastructure spending, Australia's presence in Antarctica and many others.

This bill also responds directly and specifically to the Williams case, in which the High Court invalidated the national school chaplaincy program. A majority invalidated payments under the program on the ground that they were not supported by legislation. The bill before the parliament deals directly with that need. As parties are aware, we do need to provide certainty for these programs before parliament rises for the break. The only responsible response to government spending is to get this passed and passed through the Senate today.

As I indicated, I would like to make some brief comments on the amendments that have been foreshadowed. In respect of the amendment by the opposition to insert a six-month sunset clause, we need to be clear about the actual implications of this proposal. The effect of this would be to potentially put 900 chaplains' contracts at risk in Queensland. We cannot give these 900 chaplains the confidence of a forward contract beyond 2012 should the amendment be successful. This would mean over 900 chaplains would not be able to be contracted for the next school year.

The government are also of the view that the amendment would make this legislation legally meaningless. It would create great risk for the ongoing operation of important government programs, including chaplains. We are advised it means that no contract that extends beyond that six-month period would be able to be responsibly entered into. It would mean that the government could not enter into any agreements or have programs which went beyond the sunset provision. After the sunset clause, if new legislative support were to be provided, all agreements and programs would need to be re-established. This would therefore defeat the purpose of the act, which is to provide legal certainty for Commonwealth programs across everything from foreign aid to disability services and so forth.

I make some brief comments on the amendments foreshadowed by Senator Milne. We believe the proposed response to Williams encapsulated in this bill is responsible. The government do recognise that the decision increases the ability of the parliament to scrutinise the expenditure of Commonwealth money and this bill strikes a balance. It provides oversight to the parliament on new areas of spending and also provides flexibility for governments to respond to emergencies and unforeseen events. The government do not interpret the regulation-making provisions in this bill as unbounded and as shifting from the practice of governments for many years, and of all persuasions, in relation to the majority of Commonwealth expenditure. If one considers the stock of all government spending, approximately 75 per cent is in standing appropriation bills, which provide legislative backing. So when it comes to programs such as the age pension, the Pharmaceutical Benefits Scheme and payments to the states, we have and will continue to implement legislation.

In recognising the regulation-making power in this bill is broad, the government will obviously work through implementation issues over time. This would include looking at the utility of a set of principles or guidelines around government determining which programs are more appropriately underpinned by primary legislation and those for which regulation is suitable.

In conclusion, the bill is a measured, appropriate and necessary response to the Williams decision. It will ensure that the government can maintain funding for community programs, including the National School Chaplaincy and Student Welfare Program, and has been designed to address the new requirement for specific legislative approval of spending in programs identified by the High Court. This spending includes services vital to the lives of millions of Australians, an issue that parliament needs to resolve and resolve quickly. I thank the Senate.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

The Financial Framework Legislation Amendment Bill (No. 3) 2012 was presented in the House of Representatives yesterday afternoon by the Attorney-General as an urgent response by the government to the High Court's decision in Williams v Commonwealth, which was handed down on Wednesday of last week. That decision found that funding for the National School Chaplaincy and Student Welfare Program, to which I will refer for the sake of shortness as 'the chaplaincy program,' which the opposition strongly supports, was beyond the executive power of the Commonwealth because it was not supported by an act of parliament and was therefore not a valid exercise of the executive power under the Commonwealth under section 61 of the Constitution, which provides:

The executive power of the Commonwealth is vested in the Queen and is exercisable by the Governor-General as the Queen's representative, and extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth.

I should stress that the only Commonwealth program which the High Court's decision invalidated was the chaplaincy program. However, the language and reasoning of those justices who comprised the majority in the Williams decision have potentially far-reaching implications for other Commonwealth programs which rely upon the exercise of the executive power without appropriate statutory authorisation.

The solution proposed by the government is to amend the Financial Management and Accountability Act to provide for the validation of a large number of Commonwealth government programs and grants. This is proposed to be done by regulation. In all, some 11 types of Commonwealth financial assistance grants and some 416 types of programs, providing for the payment of Commonwealth moneys, are set out in the draft regulations, with which the opposition has been provided. I want to indicate that the opposition, with grave reservations, and subject to a sunsetting amendment to which I will return in a moment, has decided to cooperate with the government in expediting the passage of this bill through the parliament this week. Our decision to do so, however, should not mask our very grave concerns about the legal validity of the approach which the government has adopted—concerns which, I might say, were relieved not at all by the speech we just heard from Senator Wong. I do not criticise Senator Wong for not having read the Williams case, because I doubt she would have had time to do so. But those who prepared the notes for her ought to have read the Williams case and they have plainly not understood its effect.

I should also record that my request to the Attorney-General on Tuesday to be provided on a confidential basis with a copy of the Commonwealth's legal advice was refused by the Attorney-General. I understand that ordinarily legal advice to the government is not provided, even on a confidential basis, to the opposition, but this is an unusual case. It does not arise out of a political controversy and it is a case in which the government is seeking bipartisanship. Under the previous Attorney-General, Mr Robert McClelland, on two occasions after a decision of the High Court struck down either legislation or a ministerial decision, in respectively the Lane v Morrison case and the Malaysia solution case, the legal advice was provided to the opposition—indeed, in the latter case it was published—when the government sought the opposition's cooperation to deal with the consequences of those two High Court decisions. I can but wonder why on this occasion that level of cooperation was not afforded. Nevertheless, it was not.

So the opposition, without having the benefit of considering the government's legal advice, has arrived at its own views about this legislation. Our concern relates to the method adopted by the bill, the essence of which is to insert into the Financial Management and Accountability Act a new section, section 32B, which purports to validate any grant or payment of Commonwealth moneys which may be identified by regulation. That is done by providing that, omitting unnecessary words: 'If, apart from this subsection, the Commonwealth does not have power to make, vary or administer a grant or payment, and the grant or payment is specified in regulations, then the Commonwealth has the power to make the grant or payment.' That is the legal method adopted by the draftsman of this bill to overcome the effect of the Williams decision on the very many—hundreds—of Commonwealth programs which are specified in the regulation.

I am far from satisfied that that umbrella form of statutory validation is effective to satisfy the constitutional lacuna which the High Court identified in the Williams case. Nor am I satisfied that the proposed section 32B, in its application to each particular grant or program payment, is supported by any of the section 51 heads of power, although in respect of many such grants or payments it may be. The whole point of the Williams case was to decide that the executive cannot spend public money without legislative authority and parliamentary scrutiny. It seems to me that it is hardly sufficient to meet the tests which the majority set out in their reasons for judgment as necessary to constitute a valid expenditure merely to specify a schedule of grants payments and simply declare them to be valid. The approach adopted is particularly inept given that the programs are to be specified merely by regulation. It was the fact that the chaplaincy program was established only by executive order which resulted in its invalidity. It seems to me that there is an element of circularity in the Commonwealth's legal reasoning.

To make matters even worse, the power to make regulations which will bring particular programs within the general validation provision of proposed section 32B may itself, as a result of section 32D, be delegated by the minister to 'an official of any agency', which means in effect any public servant, no matter how junior. This is the legislative response to a High Court decision the whole purpose of which was to limit the executive power of the Commonwealth. But, just to prove that the draftsman of this bill does have a sense of humour, he has included section 32E. Wait for this, Senator Smith; I know that you are close student of these matters. It reads:

This Division does not, by implication, limit the executive power of the Commonwealth.

When I was writing these remarks last night, I was drawing upon my own no doubt very limited intellectual resources in arriving at some conclusions about the proper interpretation of the Williams decision. So you can imagine how gratified I was this morning to read that a constitutional scholar of far greater eminence than my poor powers of constitutional scholarship, Professor Anne Twomey of the University of Sydney, had posted on the University of Sydney's website a note about this legislation, under the heading 'Parliament's abject surrender to the executive'. Professor Twomey is obviously a woman who does not hide behind clouds of ambiguity. This is what Professor Anne Twomey, a professor of constitutional law at the University of Sydney, had to say about this bill in her article published today:

Will this Bill, once enacted, be effective? It is really just setting up more stoushes with the High Court. What the Court stressed in the Pape case in 2009 and the Williams case last week, was that the Commonwealth must have a head of legislative power to support its spending. Where is the head of legislative power to support this Bill? Many of the programs listed in the draft regulations will fall under a head of legislative power, and it is conceivable (although contestable) that this Bill, once enacted, is enough to support them. But others will not be supported by a head of power and will remain invalid regardless of such a law. Hence, this Bill merely provides a fig-leaf for the Commonwealth’s legislative incompetence. It still leaves open the question of whether the Commonwealth has the legislative power to support the chaplaincy program along with many others.

Finally, what is most extraordinary above all is the fact that the Commonwealth Government seems so determined not to listen to the High Court. It ignored the High Court’s judgment in the Pape case, merrily going on with funding of bodies and programs without sufficient legislative power. In response to the Williams case it simply enacts a law that attempts to restore what it wrongly believed to be its former powers, without actually listening to or taking to heart the High Court’s concerns about a democratic deficit, the important role of parliamentary scrutiny and the importance of federal considerations. This Bill, in a bald-faced manner, rejects the fundamental propositions put by the High Court in the Williams case. The Commonwealth is clearly asking for another clobbering by the Court.

Those are the views of Professor Twomey, who arrived at the same conclusion I did. I am sure Professor Twomey's words carry a lot more weight than mine on this matter. I do say with all due respect, and I know they were operating under great pressure of time, that those who drafted this law and advised the government that it was a sufficient legislative response to the Williams case do not understand what the Williams case decided.

Senator Cormann interjecting—

Thank you, Senator Cormann, for your interjection. I was about to demonstrate the accuracy of what Professor Twomey said in her article. Senator Cormann has drawn to my attention an exchange of questions and answers from the most recent Senate Finance and Public Administration Legislation Committee estimates hearing on 23 May 2012. Senator Cormann asked officers of the Department of Finance and Deregulation:

Senator CORMANN: What is the approach of the Commonwealth in terms of making sure that any and all of its spending is consistent with the constitutional requirements and does not go beyond what is authorised under the Constitution? What checks and balances are in place?

After an exchange that went for about a page, Mr Tune from the department ended up answering that question this way:

In the main we are relying on precedent here, so things have been going along in their 'likeness' and you make the assumption that they are okay. Where you have got new things and the same questions arise you go to the Attorney-General's Department to get their view. Ultimately, of course, this is a matter for the courts.

Senator CORMANN: What you are saying is consistent with what the Prime Minister's department told the inquiry by the Senate Select Committee on Reform of the Australian Federation:

To date the approach we have taken is that current arrangements will continue unless subsequent decisions by the court suggest that a particular activity should not.

So what you are saying is we will keep spending in the way we are spending unless somebody successfully challenges that a particular item of expenditure is not appropriate under the Constitution.

…   …   …

Mr Tune : The Attorney-General's Department may make some new interpretation, but until they do that is the way you operate.

A few lines down it continues:

Senator CORMANN: If I could ask this on notice: since the decision of the High Court in the case involving the Commonwealth and Mr Brian Pape the instances where Commonwealth expenditure was subject to advice on whether or not it would be consistent with the requirements of the Constitution. If you could provide me a list of instances where expenditure was reviewed from that perspective I would really appreciate it.

Mr Tune : Yes.

I understand from Senator Cormann that no such list has been forthcoming. So in fact the very thing that Professor Anne Twomey referred to in her article this morning where she said that the Commonwealth seems determined to ignore the judgment in the Pape case, 'merrily going on with funding of bodies and programs without sufficient legislative power', is precisely what is happening, as was confirmed to Senator Cormann in estimates last May. This is entirely unsatisfactory.

In short, this government's response to the Williams decision to invalidate a particular program because it was established by executive action rather than legislation is to say that all programs are validated so long as they are identified in a regulation, and that regulation does not even have to be made by the minister. That seems to be hardly an adequate response. My preliminary view, which I am emboldened to see is shared by Professor Anne Twomey, is that the bill is a flawed bill that does not overcome the legislative gap or constitutional problem identified in the Williams case.

Nor is the opposition satisfied with the manner in which the government has dealt with us in seeking to address the issue. Although the High Court handed down its decision on Wednesday last week, the first approach to the opposition by the government was the day before yesterday, some three working days after the judgment, when the Attorney-General invited me to a briefing after question time and outlined in broad terms the approach the government was proposing to take. It was at that meeting that my request to examine the government's legal advice was refused. When I met Ms Roxon on Tuesday afternoon I was promised a draft bill by late that night or very early the following morning. In the event, an initial draft was received just before 9 am yesterday. It was replaced later in the morning by another draft, which contained important differences. Neither the shadow cabinet nor the opposition's leadership group had a chance to examine the draft prior to its introduction by the Attorney-General in the House of Representatives late yesterday. The opposition had only a few minutes notice of the final iteration of the bill. As a result, we have gone into this debate having had only a matter of hours to consider the draft legislation and not having had any time to consider each of the more than 400 categories of grants to which it applies. For that reason, while expediting the passage of this legislation today because we want to cooperate in ensuring these grants continue to be paid—notwithstanding our doubts about the constitutional validity of the bill—the opposition proposes an amendment sunsetting the legislation until 31 December this year so that the matter can be considered properly and with the benefit of time.

I heard Senator Wong's observations in her remarks before that the sunset clause would have the effect of making it impossible for the Commonwealth to enter into contracts having an expiry date beyond that time or to make grants. Senator Wong, once again those who prepared those notes for you have let you down, because the proposition you advanced is directly at variance with what the court decided in the Williams case. Referring to the well-known authority of New South Wales v Bardolph, the Chief Justice said:

The case is authority for the proposition, applicable to the Commonwealth, that the Executive Government ... could enter into a binding contract absent prior parliamentary appropriation for the expenditure of money—

on the project. In effect, that is what this seeks to do. The sunsetting clause will have no effect on the application of that principle to these circumstances. The opposition will allow passage of the bill, but we record our deep concerns as to its constitutional validity.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise today to comment on the Financial Framework Legislation Amendment Bill (No. 3) 2012, which is being brought to the parliament for in response to the High Court decision in the case of Williams v Commonwealth of Australia. That case was brought in relation to the national school chaplaincy program which has been operating in Australia. The Greens have had considerable concerns about that chaplaincy program for a good length of time, particularly in relation to the need to make sure that people who are offering counselling and welfare support to students in our schools are appropriately qualified.

Having been a teacher before I came into the parliament, I am deeply concerned that people who have no tertiary qualifications are currently allowed into schools to provide advice on welfare and other matters to young people. Nobody could claim to understand the complexity of life as a teenager—now or previously—and certainly that was my experience as a high-school teacher. But the one thing I think is critical is that people in schools who get the confidence of young people and sit down and talk to them about the matters of concern to them, particularly about issues in relation to welfare—they used to be known as guidance officers or psychologists and so on—need to be professionally qualified. The chaplaincy program does not provide for that. I understand that the government has reorganised some of that program and made the qualification at least a certificate IV. Until the government did that, it was a matter of people having just some qualification in hours. Even so, tertiary qualifications are appropriate. If tertiary qualifications are required for people teaching in our schools, they should most certainly be required when it comes to giving young people the kind of support that is so necessary in the areas of guidance, welfare and the like.

That is why I will move a motion at the end of the second reading debate which says that the Senate considers that the National School Chaplaincy and Student Welfare Program should be replaced with a program offering genuine counselling and other assistance to students by professionals with appropriate tertiary qualifications. I think that is critical, and I hope that the coalition will support that second reading amendment. The government have indicated that they are not going to support it, but I invite the coalition to think about it because it is critical that we have people with appropriate tertiary qualifications speaking with young people in our schools.

In spite of what has been said about the changes to the program, I was very concerned when I saw that $13 million of the $16 million to be paid in relation to the school chaplaincy program at the end of the financial year, at the end of this month, was going to four evangelical churches. That reinforces to me that we are not seeing money spent on supporting people with tertiary qualifications in our schools and offering the kind of advice that young people so badly need. I want to make it very clear: the Greens have said from the start that we certainly want to see the $220 million the Commonwealth is providing to support students in our schools given to our schools and spent; but we want to see it spent on supporting appropriately qualified people in our schools. That leads me to the issue of why we are dealing with this legislation today. It was as a result of the Williams case in which the High Court held that the Commonwealth government could not rely on executive power alone. This article I am holding is by Professor Anne Twomey. I noticed Senator Brandis was quoting from her piece today and I will as well. She says that in that case:

… the High Court held that the Commonwealth Government could not rely on executive power alone to support the funding of the chaplaincy program. Not even an Appropriation Act was enough to support it. There needed to be validly enacted legislation to support such expenditure. The Court stressed a number of points. First, this was public money that was being spent (not the private money of the Government) and that it therefore had to be subject to parliamentary scrutiny. Secondly, there is a need for parliamentary engagement in the formulation, amendment and termination of programs for the spending of money and there will be a ‘deficit in the system of representative government’ if these programs remain solely within the Executive’s domain. Thirdly, the Court pointed to ‘federal considerations’ and the fact that the public school system in a State ‘is the responsibility of that State’.

So I want to go to the particular focus here on the '"deficit in the system of representative government" if these programs remain solely within the Executive's domain'. This is something the Greens feel very strongly about and, when the High Court case decision came down this week, it went to the point that I made and that was so strongly evident to me—that is, the High Court was saying it is time to rebalance the power of the parliament vis-a-vis the executive.

For way too long executives have taken it upon themselves to not have parliamentary scrutiny for a number of programs and public expenditure. Rather, they have done it in this way through various programs. That is clearly one of the issues we have always had with majority governments vis-a-vis parliaments where there are shared powers. When you have a majority government, the executive can use the parliament as a rubber stamp, whereas when you have minority governments or shared power arrangements then the parliament has to actually deal with the issues and the executive cannot just do what it likes—as it can when it has a majority power, especially if it ends up with a majority in both houses. But, in particular, if you do not have a majority then you do have to come back to the parliament more frequently for validation of legislation or validation of programs.

In her article, Professor Twomey goes on to ask how the Commonwealth parliament has responded to the High Court's very clear indication. As Senator Brandis noted a moment ago, her ultimate conclusion was that this legislation rejects the fundamental proposition that the balance needs to be restored between the power of the parliament vis-a-vis the power of the executive. She notes that the Financial Framework Legislation Amendment Bill (No 3) 2012:

… gives legislative authority to the Executive to make, vary or administer any arrangement by which public money is paid out by the Commonwealth and the grant of financial assistance to any person whatsoever. The only constraint is that the arrangement or grant must be either specified in financial management regulations, or be included in a ‘class of arrangements or grants’ or a program mentioned in the regulations. The draft regulations show that these categories of approved grants and programs are extremely wide, including expenditure for ‘Foreign Affairs and Trade Operations’, ‘Payments to International Organisations’, ‘Public Information Services’, ‘Regulatory Policy’, ‘Diversity and Social Cohesion’, ‘Domestic Policy’ and ‘Regional Development’.

Clearly that is why she concludes that the Commonwealth is not really listening to the High Court. It is not really listening to the fundamental issue that there is real concern in the High Court about the democratic deficit; that is, the role of parliamentary scrutiny of federal considerations, being those of the Commonwealth in relation to the states.

Professor Twomey goes on to say that, contrary to the view that was being put by some of the speakers in the debate in the House of Representatives yesterday—their view being that this bill was just about validating existing programs—it goes much further than that. She says:

It gives the Executive carte-blanche to enter into such programs in the future without any parliamentary scrutiny at all as long as the program or grant comes under one of the existing broad descriptions in the regulations, or with only the need to amend the regulations (by executive action), if a new category needs to be inserted. Never has such enormous power been surrendered by the Parliament to the Executive in one hit …

That is her reflection on what happened in the House of Representatives yesterday. I will repeat it because I think it is quite shocking at one level:

Never has such enormous power been surrendered by the Parliament to the Executive in one hit …

So, in the view of the Greens, what needed to be done in response to the High Court decision was, first of all, to validate existing programs, because clearly there are legacy issues with programs that are already in place—and we would want to see the money for those programs expended in the way that was envisaged.

However, there also needs to be a rebalancing of the powers of parliament versus those of the executive and there needs to be some process to enable that to happen. The problem that we as a parliament have now is that there is so little time before the parliament rises for the winter break. We have to make sure that we validate the legacy programs but at the same time deal with, and enable the debate that has to be had about, the rebalancing of this relationship. That is why the Greens do not only have a second reading amendment—the one I foreshadowed dealing with the issue of appropriate qualifications for the chaplaincy program—but are also proposing an amendment which my colleague Senator Wright will discuss a little later. The amendment would give the Commonwealth six months to identify any other programs where there are legacy issues and which might need to be caught up in validation. The amendment would also require that, as of 1 January next year, any new program would have to legislated—that is, it would have to come through the parliament for parliamentary scrutiny. That would enable the debate to be had over the next months as to what the threshold should be—how you would determine what needs to have legislative power, coverage, approval or scrutiny of the parliament and what could be done by a disallowable instrument in a regulation. That is one of most important things we have to get out of this; otherwise it will be true that the Commonwealth has used the short time line we have to rush through the parliament not only the validation of the legacy matters but the giving up of the powers of the parliament to the executive.

The High Court has done a great favour to the parliament by giving us the opportunity to take back for the parliament some of the powers that clearly the Constitution deemed appropriate to the parliament. We ought not to be giving up the opportunity to take those powers back when we have the chance to discuss this in an appropriate manner, to take advice and get some of the legal academics, the constitutional lawyers and others around the country sitting down to work out how we might rebalance things.

One of the concerns I have also is—and I completely understand why the government has to validate the existing programs and I totally understand that that has to happen—that, in rushing to do this, the question will remain whether in fact this is the most effective way to deal with something like the chaplaincy program alone. Professor Twomey says:

Where is the head of legislative power to support this Bill? Many of the programs listed in the draft regulations will fall under a head of legislative power, and it is conceivable (although contestable) that this Bill, once enacted, is enough to support them. But others will not be supported by a head of power and will remain invalid regardless of such a law.

She goes on to say:

… this Bill merely provides a fig-leaf for the Commonwealth’s legislative incompetence.

I think that is harsh in the context of needing to deal with this in the time frame that we have, but, nevertheless, it makes the point that when you rush to respond to a High Court decision with the implications that this has, you need to deal with both matters: you need to deal with the immediate matter of validating existing programs, but you also need to deal with the big picture, which is the opportunity that the parliament has to take back some of the power that it rightly has under the Constitution—power that over time has been taken by the executive.

The Greens take this very seriously, and that is why we are moving amendments which will do exactly that. Our amendments will do three things. By passing this legislation, we will validate the existing programs. Through our second reading amendment, for which I ask the support of the Senate, we will get tertiary qualified people in our schools to give the appropriate level of counselling and support to students. Thirdly, through our substantive committee stage amendment, we will give effect to what the High Court wanted—to ensure that as of 1 January next year any new program must be legislated for. That would buy us the time we need to take the opportunity, and I have heard the coalition say that they also think this is important, to have the debate we need to have about how to effectively take on what the High Court has said. We in this parliament appreciate this opportunity that the High Court has given us and we want to restore the powers to the parliament. We take to heart the High Court's concern about the current democratic deficit.

The Greens absolutely want to see this debate go to not just the immediacy but the long-term implications of addressing that democratic deficit. From our point of view, we have gone some way to doing that with a parliament that is a shared power arrangement. For the first time in a very long time, matters have had to come before the parliament that executives would have just brushed away in the past. Our amendments go further than that in making sure that public money that is being spent has appropriate parliamentary scrutiny.

The community would be reassured by that because they worry about how much is done behind the scenes—how much pork barrelling goes on and the like. Parliamentary scrutiny enhances our democracy just as shared power parliaments enhance our democratic representation and give effect to the wishes of the constituency more appropriately—because it means everybody's voice is heard and everybody's voice can be brought to bear in bringing appropriate changes to legislation.

I am supporting the Finance Framework Legislation Amendment Bill (No. 3) 2012 and I invite the Senate to support our second reading amendment in relation to chaplains and to support our substantive amendment which goes to the heart of restoring parliamentary power vis-a-vis the executive.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

I rise to speak on the Finance Framework Legislation Amendment Bill (No. 3) 2012 because I think it is one of the bills of higher importance that will come before this parliament. In a Westminster parliament, there are few issues more important historically than the legislature's control over the power of the purse. In the Williams decision last week, which has provoked this particular piece of legislation, the High Court reasserted the power of the legislature over power of the purse. I find it particularly disconcerting that, after a High Court decision that has very serious implications for the power of the Commonwealth and the executive to appropriate and spend money, we are facing this bill, having been provided with very little notice. In fact, when it was first introduced into the other place yesterday, changes were still being considered and full notice had not been provided to the opposition. That stands in contrast to some other examples where urgent legislation has been necessitated by decisions of the High Court.

One that I am particularly familiar with is the Hammond case of 1997, where, on a reading of the excise powers, the power of state parliaments to levy what the High Court defined as an excise power—which was essentially anything between stages of production and sale of a good, and ruling out what had been known as franchise fees for tobacco and for petrol—had profound impact on state budgets.

Everyone knew that there was the potential for a decision like this from the High Court last week. We knew that because we had the decision in the Pape case recently, which flagged to members of this parliament and to members of the Australian community that the court was reading the power of the appropriation of funds, and in particular the heads of power of the Commonwealth, in such a way that a decision like this was possible.

In 1997, when in the Hammond case the High Court did a lot of what I would describe as damage and profoundly changed the federal financial relations of this Commonwealth, there was legislation ready to go. There was legislation that was announced particularly quickly. There was legislation that, as I understand it, was quickly enacted with genuine consultation with the opposition at the time. In this case, I think it is fair to say that that consultation has been lacking. I think that is a disappointment, because, when it comes to issues of providing certainty for those in receipt of Commonwealth funds, when it comes to providing certainty for members of the Australian community who might depend on particular programs, or indeed when it comes to people overseas, I think this parliament has shown a genuine willingness to act as one and to provide a means by which certainty within the law can be provided.

But in this case what we have is a piece of legislation that seems to assert that what the High Court said was questionable is no longer questionable. In schedule 2 attached to this bill there are very broad-brush descriptions of what the Commonwealth claims are programs which are now valid by virtue of this bill. I would like to draw the attention of the chamber to one of them—that is, 412.002, titled 'Payments to International Organisations':

Objective: To advance Australia’s foreign, trade, economic, and security interests through membership and participation in international organisations and their various peacekeeping activities .

That is a particularly broad-brush description of a program—if it indeed would qualify as such. In fact, the way I read it, it is a more a grab-bag of various payments to various organisations for various objectives, which the government has attempted to put under the broad program objective of advancing Australia's foreign trade, economic and security interests.

One of the worst things we could do in this place would be to not deliver the certainty that is required, to put through legislation without sustained debate or inquiry, which is what the government has asked with respect to this, and to not actually address the issue of certainty but merely lead to further litigation. That is one reason why the opposition is moving the amendment it has outlined; an amendment which, I note, was negated by members of the government and their allies in the lower house yesterday.

The opposition does not accept the advice provided by the minister for finance that the ability to enter into contracts would be limited by the provision of the sunset clause. I put to members of the government that actually the sunset clause serves to provide greater certainty, because it will make sure that there is a more detailed consideration by this parliament in both chambers, with their two distinct constitutional roles, to examine the impact of both the Pape and the Williams cases.

It seems to me that the piece of legislation we have before us from the government is a very brave one because, while there were varying judgments last week, the point of this bill seems to be to legitimise, through an assertion of an act of this parliament, that we have met the criteria, stated by various justices, that the Commonwealth executive needs to have an act upon which to base an appropriation—more than simply the appropriation act and a contract entered into by the Commonwealth.

This bill does not do anything to address the potential uncertainty, in the opinion of some—I know my colleague Senator Brandis has mentioned those in his contribution earlier today—that these appropriations need to be linked to a particular head of power. I do not think anyone in this chamber or anyone on behalf of the government could assert that that opinion is not valid. I am not asserting that it is necessarily the case; I am simply saying that it is something that should be considered in more detail, and I put to the government that the provision of a sunset clause could bring this legislation back to the parliament so that it could be considered in more depth and so that expert advice could be taken, because these areas are matters for debate.

While the coalition remains a strong supporter of the program it introduced in government—the student chaplaincy program—and I have little doubt that that program could be made quite constitutionally compliant, I sense that this may not be the best way to deal with it. There has been an opinion expressed by some that the High Court decision last week may prove to be a disaster for the Commonwealth. I state no opinion with respect to decisions of the High Court, other than to say the court is there for a reason and needs to be respected as an institution that enforces the written terms of our Constitution as enacted by the Australian people. So politicians or commentators can complain all they want, but in this country the people are sovereign and that is expressed through the Constitution. Limitations upon the executive are, in essence, no bad thing. Limitations upon the executive to require it to have parliamentary appropriation are themselves no bad thing. In fact, civil wars have been fought in countries about such matters. It is one of the founding principles. It was one of the great, most lengthy items of debate at the constitutional conventions leading up to the formation of our nation—the various powers of appropriation, the balance between the two houses and the debate over the ordinary annual services of government clause that has been happening for 110 years. Those debates represent the very essence of what this particular case or series of events are about—that is, the relative balance of power between the executive and parliament in order to serve the needs of the community through appropriations and programs.

I would not like to see a situation where the broad brush strokes of this bill that comprise an assertion of Commonwealth power to appropriate and spend money lead to further uncertainty and litigation. I have been contacted by a number of people of high standing, much more highly trained than me in this area, who are of the view that this bill would not pass muster before the High Court if a similar action were brought. I do not think that is what anyone is seeking to do today. We are seeking to provide certainty.

I would urge the government to very seriously consider the offer, meant in all good faith, by the opposition to insert a sunset clause into this bill to ensure that this parliament at some point has an opportunity for a much more detailed consideration of the impact of these two High Court cases. I have not had a chance to look through all of the programs listed in the regulations in schedule 2 of this bill. That in itself is a problem. But if there are provisions in here that are potentially challengeable because they lack an easily identifiable head of legislative power for this parliament to appropriate funding then I do not see how we are doing the recipients of these programs—or indeed the service providers of these programs—any favour by passing this legislation today.

I stated in my first speech in this place and have written many times that I am a proud federalist. I do not see limitations placed on the activities of this parliament or the executive drawn from this parliament as, by their very nature, a bad thing. We have in this country a limited Commonwealth that was meant to leave a great degree of autonomy not to the states as governments but to the people of the states. It is often said that this is a states' house. It is a term that I have not been comfortable with because it is a house for the people assembled by the states. It is still a people's house but it is people assembled by the communities in a geographic sense, as defined by the states.

I am not one who thinks that the lines of our federation are in any way relevant. The whole point is that we have a federation that provides only limited power to the Commonwealth. The decision last week in the Williams case was a reflection of that. It is a decision that many of our state parliaments would not face. They do not have a written constitution that cannot be amended by the parliament in the way this place does. We should view what happened last week partly as an opportunity to clarify the powers of this Commonwealth and to clarify the powers of the executive and the parliament. If they are more limited than before there is a mechanism to deal with it—a longstanding one—and that is to put that choice to the people. I note that the overwhelming number of those choices have been put by those opposite and the overwhelming number of those have been profoundly and completely rejected by the people, with very few successes. I take that as a signal from the people that they do not want us to gather more power in this parliament—when the highest court in the land limits the power of the executive, which many people have for many years been complaining about, that has an overweening influence on the legislature.

I used to be a tutor in politics. I remember academic treatises would always refer to the overarching power of the executive and how it needed to be constrained. What we had last week was the High Court limiting the power of the executive and simply saying that parliament needs to consider it, that parliament needs to make the decision to appropriate funds. What it potentially has also said, when looked at in the context of the Pape case, is that there may well be limitations on this parliament to appropriate funds. We do not have the clause of the United States constitution which allows us to appropriate and spend for the general welfare of the people. Our founding fathers chose not to put that clause in our constitution, to create a more limited central government.

This particular bill, I fear, will not address all of the problems the government hopes it will address. Indeed, it will not address the problems that the opposition hopes it might address. We agree with the government on the need to provide validation and certainty to recipients of Commonwealth programs, to the service providers that do so much for members of our community. I strongly agree with that—in particular, with the decision made last week on the chaplaincy program, that we provide certainty for students and service providers who deliver and benefit from that program.

There should have been something ready earlier. It should have been provided to the opposition last week. It should be—

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The High Court decision was on Wednesday!

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

I pointed out that in 1997 there were legislative programs in place to deal with bigger decisions, like the Hammond case, where states' franchise fee powers were knocked out and their budgets were shot by the decision of the High Court. It was possible to see this decision coming. It is one of the scenarios the government could have planned for.

I would respectfully suggest to the government that delivering the bill to the opposition yesterday, bringing it into the House of Representatives yesterday, with changes still being undertaken—so the opposition did not have a chance to consider the final bill before debate—and then bringing it to this place today, not allowing time for parliament to fully debate it, will put the very objectives of the bill at risk. We have few more important roles in this place than to oversee the power of the purse. We have very few more important roles in this place than to oversee the balance of power between the executive and the legislature. There may well be different positions between people who think the decision of the High Court between Pape and Williams was a good one and those who think it was a bad one. Regardless of that, we have to live with the decision. That is what the High Court is there for.

I urge the government and the Greens to seriously consider the opposition amendments, which will ensure that this parliament again has an opportunity to consider this issue in more depth, in due course and with a reasonable amount of time, and to provide certainty to those services which, we all agree, are important to the people of the Commonwealth.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in favour of the Financial Framework Legislation Amendment Bill (No. 3) 2012. I understand that the opposition has a role to oppose, but what I find so hypocritical is for those people opposite to come in here now and play politics over an issue that is so important. It is important to our community, but particularly important when it comes to the National School Chaplaincy and Student Welfare Program. What we are doing with this piece of legislation is ensuring that the funding continues and that there is no interruption to providing the services that are so necessary within our communities.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

The legislation won't work!

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

You can talk about 'We need to have more time'. The reality is that the High Court brought down its decision on Wednesday.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

No, last Wednesday. Have you read it?

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Last week. Here we are now, at the first opportunity we have had to bring it into the chamber, and I would have thought that in the past, Senator Brandis—through you, Mr Acting Deputy President—that those people opposite—and I know that there were some good senators, including a former senator from Tasmania in Guy Barnett—were very supportive of the chaplaincy program. It is with great interest that I will watch the debate because I can assure you that I will write regularly, as I normally do, to the chaplains around the Tasmanian community. It will be very interesting to see how those people, particularly Senator Bushby and others, vote on this very important piece of legislation.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Mr Acting Deputy President, I rise on a point of order. I think you will find that it is against standing orders for a senator to cast reflections upon an upcoming vote in the chamber and to cast reflections upon the motives of a senator in casting their vote. As the spokesman for the opposition I made it perfectly clear that the opposition is supporting the expedited passage through this parliament of the legislation.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Order! We are now moving to debating the point of order.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

I come back to my point of order: it is about reflecting upon a senator's motives in casting a forthcoming vote in this chamber. All opposition senators will be voting in favour of the bill even if our amendment fails. The senator is out of order.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Brandis, you have identified your point of order and, unfortunately, I have to confess I was conversing with the Deputy President about business of the Senate and I did not hear the comments. On that basis I would simply remind senators of the standing orders.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

This program continues—

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Your amendment means we can't enter into the contracts. There is no point of order.

Senator Brandis interjecting—

It's about running costs and the Solicitor-General's advice. You'd better go out and tell 900 chaplains that they won't have jobs next year.

Senator Brandis interjecting—

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Order! Senator Polley has the call!

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, you can see the people on this side of the chamber are very passionate about ensuring that this chaplaincy program is continued and is funded without any interruption. That is our responsibility here today in this chamber, to pass this legislation. I know that the Greens, for instance, have had problems, and that they do not support the program. But the reality is that this program has been put in place and it has been funded in the forward estimates in the budget. So I am asking people to put the interests of these young people first and foremost.

Of 1,000 new schools, 65 per cent have applied for the services of a chaplain and 35 per cent for a student welfare officer. In fact in the last round of applications the program was oversubscribed by 30 percent. I would just like to share with the chamber a comment from the acting principal of the West Launceston Primary School in my home state of Tasmania, Bev Shadbolt—and I would have to say what a wonderful principal she has been over a long period of time. She said:

We are delighted to learn that our application to seek funding for the appointment of a Chaplain has been successful. In 2012 our school has identified the building of greater community connections as a school priority. We see the Chaplain as working with students, their families and with staff. He/she will be a wonderful conduit for building connections and enhancing relationships across the school community.

I think this appropriately reflects the importance of the scheme to our schools and our community in general.

The High Court determined that the funding agreement between the Commonwealth and Scripture Union Queensland for the provision of the National School Chaplaincy and Student Welfare Program and the payments by the Commonwealth to Scripture Union Queensland under that agreement were invalid. Therefore, the way that the funding was provided, and not the program, was invalid. I think it is very important to make that distinction.

I know that a lot of schools, parents and service providers in the community have been concerned about the future of this program, which is why the government has acted so swiftly to ensure the protection of this good program. The government has taken action which it believes is an appropriate response in the light of the reasons that the High Court found the agreements and payments under the program to be invalid. This means that payments that were due to some service providers by the end of this financial year can go ahead. That is why it is so terribly important that this piece of legislation is supported, and it is.

As I said before, I know that there has been opposition from the Greens in the past, but I sincerely hope that the strategies of those opposite of trying to be obstructionist—as they so often do when they come into this place—will not come to the fore here today. I would urge people in this chamber, before they vote, to consider the real value. There were changes, but we have to remember that this was a program that was introduced by the Howard government. It was then supported by the incoming Rudd and Gillard governments. There have been some modifications to it, which have reflected what has been requested by the community.

I draw people's attention to the necessity and urgency of supporting this piece of legislation, and I endorse the bill.

Debate adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.