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Senate must be made aware something’s gotta give

By Gary Johns - posted Thursday, 14 July 2016


When an irresistible force
such as you
Meets an old immovable
object like me
You can bet just as sure as you live
Something's gotta give …

The popular song by Johnny Mercer, Something's Gotta Give, was written in 1954, the year Malcolm Turnbull was born. He should revive it as an anthem for the nation. The irresistible force is public debt. The immovable object is the Australian Senate.

The 2016-17 budget, presented to the electorate on May 3, lapsed at the dissolution of the parliament on May 9. The government will have to reintroduce its budget knowing that a majority of senators refuse to cut spending as a path to erasing public debt.

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It is highly likely that some superannuation tax increases will be removed from the budget and reintroduced after reconsideration and possible negotiation with the Labor Party. There also may be negotiation with Labor over those savings measures previously introduced and rejected by the Senate.

It is not in Labor's interests to allow the budget deficit, which it created, first by spending more than it had and second by refusing Coalition savings, to get further out of hand. Just as the Liberal Party rarely has the numbers to govern other than in coalition with the Nationals, it is increasingly likely the Labor Party will never again govern in its own right.

Instead, it will rely on the Greens, and Greens are a very expensive commodity.

But any agreed cuts will be lean. To coin a phrase, they are not going to cut it. Coalition politicians can forget spruiking mandates. A majority of senators is unlikely to support any ''new'' cuts to payments such as pensions and benefits.

This is where Malcolm has to shout out loud: Something's gotta give!

Pensions and benefits under the Social Security Act 1991 are automatically paid through ongoing appropriation authority enabled by that act.

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This means almost 80 per cent of spending receives automatic approval on an ongoing basis. A government cannot change the way this money is spent without also changing the underlying acts involved.

In the event of the Senate refusing to pass changes to pensions, they keep getting paid. The Senate can squeeze the government but not the pensioners. The government is powerless to do anything, save another double dissolution.

There is, however, a class of payments for which there is no legislation other than appropriations. The commonwealth provides financial assistance to state governments. In the 2016-17 budget the commonwealth was to provide the states with $116 billion in total payments. This money amount to 26 per cent of total commonwealth expenditure.

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This article was first published by The Australian.



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About the Author

Gary Johns is a former federal member of Parliament and served as a minister in the Keating Government. Since December 2017 he has been the commissioner of the Australian Charities and Not-for-profits Commission.

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