MICHAEL KEATING. Is it legitimate to pay for a postal plebiscite using the Advance to the Minister of Finance?

Aug 17, 2017

This article questions the legitimacy of by-passing the need for Parliament’s approval by using the Advance to the Minister of Finance to pay for the Government’s postal plebiscite regarding attitudes to marriage equality for same-sex couples.

As all readers of this blog know, or should know, since Magna Carta the foundation of our parliamentary system of government is that the executive (that is the government) cannot spend money without authorisation from the Parliament covering the amount and purpose of that expenditure.

In the case of the plebiscite regarding marriage equality for same-sex couples, the Parliament has actually refused to vote the money that would be needed.  Nevertheless, the Government has decided to ignore all conventions about proper procedure, and by-pass the need for parliamentary approval by drawing on the Advance to the Minister of Finance to pay for a more limited postal plebiscite.

The purpose of this article is to consider whether this is a legitimate way of proceeding.  I am not concerned with the substance of the issue of marriage equality for same-sex couples, but purely with whether any postal plebiscite about that issue is legitimate if it can only be paid for in this way which avoids the need for Parliament’s approval.

First, it is important to understand the purpose of the so-called “Advance to the Minister of Finance”: why Parliament has created an instrument that effectively allows its control over expenditure to be by-passed, although only in special circumstances.  Essentially this is because parliaments have recognised that there can be circumstances requiring a quick response from government, when it is impractical to obtain parliamentary approval in advance of that government response.  In such circumstances, it can be appropriate for the government to draw on the Advance to the Minister of Finance to fund the necessary expenditures.  But naturally there are tight criteria controlling this access to the Minister of Finance’s Advance and it needs to be demonstrated to the Auditor General that these criteria have been met.

The two criteria that are generally used are that the Minister of Finance must satisfy himself that the need for a government response and the associated expenditure is both urgent and was unforeseeable.   In the case of the marriage equality postal plebiscite, it is at least questionable whether it is urgent to proceed, given that when asked to vote on another plebiscite for the same purpose, Parliament did not agree.  In addition, now that the need for this particular plebiscite has been recognised by the government, it is less clear that it was unforeseen, or more pertinently, that there has not been time to move a bill in Parliament seeking the necessary authority before proceeding.

But in reality it would seem that the government is seeking to use the Advance to the Minister of Finance to avoid having to gain parliamentary approval of its actions.  To me that seems to be an entirely inappropriate use of the Advance to the Minister of Finance.

During the almost six years that I was Secretary of the Department of Finance (1986-1991) I can recall a few occasions where the Advance was used.  In each case the Department was required to give an opinion that the proposed use of the Advance was to meet an urgent and unforeseen expenditure demand.  At no time, then or before or since, can I recall the Department being asked to facilitate use of the Advance to the Minister of Finance for a purpose that seemed unlikely to be supported by the Parliament.  I believe, however, that my Department would have advised against use of the Advance for a purpose that did not enjoy wide support, first and foremost because that places the future of democratic control at risk, and also because use of the Advance in this way would have placed the future of the Advance itself at risk.  The Department of Finance is the custodian of that Advance, which is intended to meet a real need for some flexibility in an unforeseeable emergency, and if that flexibility is abused, and consequently lost, future governments and the nation will be worse off.

While for good reasons we will never know what the Department of Finance advised on this occasion, or even if it were asked, we are now left in the uncomfortable situation where one of three things occurred:

  • The Department was never asked, but in that case, and given the significance of the issues at stake for the future of good government, I would argue that the Department should have advised anyway
  • The advice of the Department on a strict issue of proper procedure was ignored by the Government
  • The Department agreed with the Government, despite what I have described as the case against using the Advance to the Minister of Finance in this way, and the Department’s traditional responsibility to act as a custodian of due process regarding access to this particular spending authority.

It will also be interesting to see in due course how the Auditor General reacts to this attempt to use the Advance to the Minister of Finance as a means of avoiding the need to obtain Parliament’s approval of expenditures.  Perhaps the Audit Office will consider whether it should recommend that the controls over the use of this Advance need to be tightened.  For example, in the care-taker period of government after an election is called, no decisions can be taken without discussion with the Opposition (ie the alternative government).  A similar restraint on the use of the Advance to the Minister of Finance would be to equally limit its use in future to expenditures which have been agreed with the Opposition Shadow Minister.

But right now, the Government’s determination to press on with a postal plebiscite that lacks any parliamentary authority, raises real doubts about both the policy making processes of the Turnbull Government, and its respect for the institution of parliament and the basic tenets of parliamentary democracy.

Michael Keating AC is a former Secretary of the Department of Finance.  He subsequently became Secretary of the Department of Prime Minister and Cabinet.

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