‘Executive creep’ threatening parliamentary independence

By David Donaldson

Tuesday June 6, 2017

Parliamentary independence around Australia is under threat as governments retain the power to decide how much funding to allocate to the bodies charged with their oversight, according to a paper recently published by the Victorian Parliamentary Library.

Victoria, however, has seen the strongest “executive creep”, it argues, with parliament treated as a “government department” by the Treasury, told to meet performance requirements and report to the executive on expenditure.

“This imbalance must be reversed if the separation of powers is to perform its constitutional role, and Victoria is to avoid Parliament becoming a flawed branch of democracy,” warns the research paper.

Who really holds the purse strings?

Financial independence is a common problem for parliaments at both state and Commonwealth level in Australia. While parliament holds the power to pass budget appropriation bills, it is up to the executive to decide what is in the bill — with the assistance of the Treasury — and thus how much money is allocated for parliamentary activities.

This is problematic given parliament’s role scrutinising government, something it would often be convenient for the executive not to have to endure. The increasing role played by parliamentary committees in amending — and improving — legislation could be threatened by a government reducing funds.

Indeed, experience in both Victoria and the Commonwealth shows that this is what happens. Under-funding of the federal Senate has in the past led to a fall in the number of amendments and hearings in regional areas. Funding mechanisms in Victoria requiring the Treasurer’s approval to carry over unspent parliamentary money into the next financial year introduces uncertainty in budgeting, introducing the possibility that inquiries could be unfunded.

President of the Victorian Legislative Council Bruce Atkinson remarked in a 2012 paper that, “Nowhere is the continued imbalance in the parliament-executive relationship more apparent than in the procedure for unspent … funds”. The system creates significant problems, he said:

“It is often considered by the executive to be in its best interest to limit and restrict this scrutiny, whether to hide deliberate misconduct, avoid political embarrassment or simply to circumvent procedural inconvenience. The work of parliamentary committees has been severely compromised. In the face of limited (or simply uncertain) funding, committees must restrict the number of references they take on and commit far fewer resources to those they do. Whether by deliberate strategy or simply unintended consequences, the current funding system allows the executive to determine the degree of scrutiny to which it is subjected. This danger is particularly acute, or perhaps simply more apparent, in the Legislative Council, both in its capacity as a House of Review and because the government often does not have a majority in the Council.”

Some parliaments, including Victoria, have a separate appropriations bill for the parliament, something the report describes as a “symbolic” concession given the executive has as much control over that piece of legislation as a general appropriations bill.

Parliamentary KPIs ‘inappropriate’

The thing that makes Victoria stand out from the crowd, the paper argues, is that the ‘purchase-provider’ model has been applied there more strongly than elsewhere.

This refers to the government approaching funding of the parliament as effectively purchasing a service; the parliament is the provider. The Victorian parliament is required to set performance measures and performance targets for each year and receives Treasury funding upon meeting those performance targets.

“This is an inappropriate extension of executive control over the legislature and treats Parliament as a government agency, which it is not,” says the report.

The performance indicators are proxies unrelated to the core business of parliament — making the law, requiring activities such as the timely completion of transcripts and payroll. Victoria is the only jurisdiction in Australia and New Zealand where parliament is mandated to report on its finances to the government on a daily and monthly basis, as well as on its performance, financial outcomes and achievement of outputs, on a quarterly basis.

The level of managerialism extended to the democratic representatives of the Victorian people is unusual:

“It is also possibly, the only Parliament which receives requests directly from the Government requesting that it ‘review its objectives’ to ‘better reflect’ its achievements and provide the Government with ‘greater clarity’ on what these objectives are. These are strong directives given to Parliament by the Executive, which should be challenged, if parliamentary independence and the separation of powers are to be upheld.”

Atkinson has previously stated concerns about this:

“The purchaser-provider model, in which the Government ‘buys’ policy outcomes from its various departments, is radically unsuited to the funding of a separate and equal democratic institution: the Parliament is not a service-provider with the ability to guarantee outcomes; nor should the Parliament contribute — or even be seen to be contributing — to the policy successes and failures of the executive it holds to account.”

The way forward

Giving parliament control over its own budgeting, supported by its own service agency, would strengthen parliamentary independence, argues the report.

Currently in Australia only the ACT has such an agency, known as a parliamentary corporate body, though it is a model common in other Commonwealth jurisdictions. The body would be tasked with responsibility for running parliament’s departments and their budgets.

This was recommended all the way back in 1991, in a parliamentary report that has never been implemented.

The parliamentary library also argues a review should be undertaken to strengthen the financial independence of independent statutory officers such as the Ombudsman, Independent Broad-based Commission Against Corruption and Electoral Commission. Currently they directly funded by the executive, as well as being appointed by the executive. Giving these powers to parliament itself would bolster the oversight role such agencies play, and was advocated for by the auditor-general, the ombudsman and IBAC commissioner in a joint statement last year.

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