Donald Trump is in trouble on so many fronts now that minor set-backs of practical administration probably do not pre-occupy him much. But there was interesting case in the US District Court recently that has the potential for Australian consequences while Australian senators have a rump of independents and minor parties capable of joining with an opposition to block legislation.
The case involved Trump’s famous Wall, separating Mexico from the United States. In 2019, Trump asked Congress for $US 5.7 billion for fencing in the Rio Grande Valley section of the border, near El Paso Texas. Congress granted only $US 1.375 billion. Trump then declared a national emergency, and ordered the US Defence Department to help construct the wall. Last September, the defence department told congress that it had been able to find $3.6 billion for wall building by deferring 127 military construction projects already authorised by congress. It argued that the existence of a national emergency authorised the diversion of funds in a way not otherwise authorised by law.
Judge David Briones ruled this diversion to be unlawful and gave an injunction preventing the spending of more than the $1.375 billion authorised by congress. Congress had intended to limit the spending with a specific appropriation. That specific appropriation “controlled” funds appropriated for more general purposes; it indicated that the specific authorisation was all that it intended the wall to get in the financial year.
The Australian Constitution, like the American one, requires that no money can be spent by the government except under a specific appropriation approved by parliament. Once this meant something: a bridge, a road, a specific social security program, the wages of public servants, and the costs of their pens were covered in legislation. They were not always at the level of pens, or individual bridges, but anyone seeking the source of spending power could find it fairly quickly in an appropriation act.
This happy state of affairs and boon to accountability fell by the wayside in “reforms” that accompanied real financial reforms, and a changeover of Commonwealth accounting systems, initiated during the 1980s. It was never a necessary component of these reforms, but it was ever so useful to politicians and bureaucrats, and set back parliament’s capacity to scrutinise parliamentary expenditure by centuries, arguably to 1689.
The modern appropriation act for a government department now might involve only three broad items, each supposedly an outcome which parliament is authorising. It might be “higher productivity, higher pay workplaces — $230 million” and be used to justify spending on an industrial relations apparatus, and anything without could be connected, however remotely, with workplace relations, including judges, bureaucrats, travel to seminars abroad, and even the spending of more than $40 million in blatantly partisan ads, “explaining” new legislation just before an election.
The High Court judges, in possibly their worst judgment this century, approved the government’s appropriation formulation, effectively holding that it could, and did, authorise anything a minister might want.
As Justice Michael Kirby, a dissenter in the Combet case remarked later, “Under the Constitution, it is the duty of this Court to uphold the law-making and supervisory powers of the Parliament. We should not sanction still further erosion of those powers and their effective transfer to the Executive Government, whether appearing in vague, indeterminate and open-ended appropriations, or in vague, indeterminate and open-ended regulation-making powers.
“There comes a point when a regulation-making power becomes so vague and open-ended that the law which establishes it ceases to be a law with respect to a subject of federal law-making power, becoming instead a bare federal attempt to control and expel State laws. When that line is crossed, this Court has a duty to say so.
“Until this Court exhibits its disapproval in a judicial fashion, by invalidating such provisions, the lesson of history is that executive governments will present such provisions in increasing number to distracted or inattentive legislators. The legislators will be unlikely to notice them in the huge mass of legislative materials, such as those presented in the present case, and contest them. They will overlook the affront to proper parliamentary supervision, particularly in the context of regulation-making provisions that are typically found at the end of bills and ordinarily attract little parliamentary attention because they are assumed to be in the standard form.”
Under the modern system, the minister for finance can approve taking money out of one area – for example money allocated to the NDIS and give it instead to another scheme – say a Sports Rorts grants scheme just before an election. Of course, an upright finance minister would insist that such money be spent properly, in accordance with general rules requiring fairness and integrity and due process, so there could be no outrage to public expectations of proper behaviour by ministers. That goes without saying, by golly.
It might once been said that Trump’s Mexican Wall problem could not arise in Australia, because in our system, the executive has a majority in the house of representatives. But the past few decades have demonstrated that senators on the cross-bench can have as much control over the budget.
Senators have not yet seized upon their power to limit an appropriation for a particular project (or, given that senators cannot amend money bills to insist that the House of Representatives does). But they will, and they should. It will start off by virtue-signalling, such as denying home affairs permission to spend more than a specific sum on its overseas concentration camps, or limiting the amount of aid that can go to some unpopular nation. It will end up establishing constitutional “principles” such as the right of parliament to be consulted before foreign troops are sent abroad.
Jack Waterford is a former Editor of The Canberra Times