BUSINESS COUNCIL OF AUSTRALIA

Transcription

1 BUSINESS COUNCIL OF AUSTRALIA Submission to the Department of Prime Minister and Cabinet on Constitutional Change 23 December 2003

2 Table of Contents The Need for Constitutional Reform... 3 Certainty and Stability: The Case for Four-Year Terms... 4 Reform of the Senate... 5 A Broader Reform Agenda... 7 Conclusion... 8

3 The Need for Constitutional Reform A dynamic and healthy business sector is of critical importance to economic development and rising living standards in Australia. Private business is the fundamental generator of jobs and wealth in Australia. The Business Council of Australia (BCA) represents the largest businesses in Australia. These are complex enterprises engaged in competitive markets. They are in business for the long term and must plan and invest for the long term. To plan and invest effectively for the long term, business requires certainty and stability particularly in the context of Government, policy reform and policy settings. More specifically, business requires a policy environment that supports enterprise and investment and which enables businesses operating in Australia to remain competitive in the global marketplace. The ability of Government to deliver such reform has a significant impact on the future of business, the Members of the BCA and their employees and shareholders. The BCA considers that current arrangements are not producing stability and certainty nor delivering the reforms necessary, and for which the BCA believes the Government has a mandate, to enable business to remain competitive. The BCA considers that there is a need for reform of the Constitution. We welcome the proposals outlined by the Government that relate to section 57 of the Constitution, which deals with the resolution of deadlocks between the House of Representatives and the Senate. However, the BCA believes that broader reforms ought to be canvassed. The Senate is now effectively a house of review, rather than its original purpose to represent and protect States interests. If we are to ensure that reform of the Senate is as effective as possible in terms of improving the role of the Senate as a house of review and delivering good governance for Australia, all aspects of the Senate should be open for examination including for example the number of seats in the Senate. In addition, the role and use of Senate committees and the processes around them could be examined. It is not in Australia s best interests to have these committees simply become a means for delay such an approach is not only unnecessarily time consuming, it is expensive. There must be greater accountability for the actions and outputs of these committees. Finally, the BCA supports a move to four-year terms for the House of Representatives. Business Council of Australia 3

4 Certainty and Stability: The Case for Four-Year Terms Policy reforms often take a number of years to develop and implement. This requires a greater degree of stability in the electoral cycle than has been the case over recent decades. Since 1972, the average duration between elections has been 28 ½ months 1 well short of three years. The BCA believes that change is needed in the frequency of elections. The BCA considers that longer periods between elections would be more conducive to Governments broadening their time horizon and tackling longer term challenges and issues. A short-term focus, driven by political expediency, will not deliver the policy framework necessary for a competitive Australia and business sector. A Government is more likely to take the difficult and complex decisions needed to make an economy competitive if it has a longer time between elections to develop and implement policies and frankly to sell the benefits of economic reform. More pragmatically, it is important to acknowledge that national elections are costly about $100 million each 2 - and disruptive. Uncertainties created by frequent elections and shifts in Government policy have an adverse impact on business confidence and planning. The BCA therefore supports a move to a fixed, four-year term for Federal governments. 1 Australian Bureau of Statistics, 2003Year Book 2 ibid Business Council of Australia 4

5 Reform of the Senate The issue of deadlocks in the Senate has become an issue of increasing importance. The BCA recognises that the Senate passes many Bills. However, the reality is that many of the most important and emotive Bills are increasingly blocked by the Senate. In other words, the Senate has become increasingly obstructionist. This has seen increasing recourse to deals and compromises - a process that increasingly lacks transparency and accountability in terms of final outcomes. Importantly, this is not a process that enhances the standing of Parliament in the eyes of the broader public. The Constitution foresaw the potential for such deadlocks to emerge. Section 57 of the Constitution provides a mechanism to enable such deadlocks to be resolved one way or another. Specifically, section 57 provides for there to be a double dissolution of Parliament if the Senate rejects, fails to pass or passes with unacceptable amendments, a Bill that has twice passed the House of Representatives. If the two Houses remain deadlocked following the double dissolution election, then a joint sitting of both Houses can be convened by the Governor-General on the advice of the Prime Minister. The double dissolution process is cumbersome and costly both in terms of time and money. The limitations of section 57, particularly in light of changes in the role and conduct of the Senate have long been recognised. In 1959 the Joint Committee on Constitutional Review noted that: section 57 needs to be amended in such a way as to maintain the principle of responsible government and to ensure the precedence of national interests over other interests. (emphasis added) 3 In considering whether current arrangements are appropriate, the BCA considers it important to recognise two key features of the Senate. Firstly, the smaller States are over-represented in the Senate. It can take as little as 7.69 per cent of the vote to gain a Senate seat. In Tasmania election to the Senate can occur with less than 45,000 votes that is roughly ¼ of one per cent of the Australian population and around ⅓ of one per cent of registered voters. The Senate quota in NSW in 2001 was 554,000, while in Victoria it was 417,000. Secondly, Senators are elected for six-year terms they do not contest every election. Much can change over six years, particularly in a political and policy context, and some Senators may not have been elected on the basis of their views on contemporary policy issues. In other words, their views might not reflect the current views of the electorate particularly in relation to current issues and developments. 3 Commonwealth of Australia (2003), Resolving Deadlocks: A Discussion Paper on Section 57 of the Australian Constitution, p7. Business Council of Australia 5

6 Effectively, these features mean that a handful of Senators that may not have faced re-election for many years that is, who have not had their performance and positions reviewed by the electorate during a particular political cycle - can hold an effective veto over reforms that are fundamental to Australia s future economic performance and prosperity. The BCA considers that Senate reform is required to address these important issues and to facilitate the more timely resolution of deadlocks if and when they emerge. The Government has proposed two options. Option 1 would allow the Governor-General to convene, on the advice of the Prime Minister, a joint sitting of both Houses to consider a Bill that has been twice blocked by the Senate with a three-month interval. Option 2 provides for a joint sitting of the Houses following an ordinary election. Both options are an improvement on the current deadlock provisions. However, the second option remains relatively costly and timeconsuming. The BCA considers that a more timely and cost effective measure for resolving deadlocks needs to be implemented. It therefore strongly supports Option 1, which enables the Governor-General on the advice of the Prime Minister to convene a joint sitting without an election. Such an approach provides sufficient time for deadlocks to be resolved, but also provides the means by which a timely decision can then be reached in a way that reflects the broad national interest and electoral outcomes. The Government paper proposes a number of ways in which the Option 1 could be modified to provide additional checks. These include: the exclusion of certain legislation; a longer period prior to a joint sitting; the Senate could be required to block a Bill three times; and/or the joint sitting could be limited to bills that implement election commitments. The first and last of these proposed amendments are likely to prove unworkable and will do little to enhance certainty. In all likelihood they would simply fuel debate and discussion about the nature of a particular Bill and whether it qualifies or not. The second and third proposed amendments would serve to undermine the intended reforms. That is they would simply make the process more lengthy and cumbersome. Accordingly, the BCA does not support any of the additional checks proposed for consideration in relation to Option 1. Business Council of Australia 6

7 A Broader Reform Agenda While the BCA welcomes the consideration of reforms to improve the resolution of deadlocks in the Senate, discussions about reform and the effectiveness of the Senate could have benefited from the examination of a wider range of issues and possible reforms. The Senate now effectively acts as a house of review - this needs to be acknowledged and reforms aimed specifically at enhancing its functioning in this capacity. In other words all aspects of the Senate should be reviewed in terms of the extent to which they enhance its functioning as a house of review. For example, debate could have benefited from more direct consideration of the implications of the interaction of the size of the Senate and the system of proportional representation. The combination of proportional representation and the increase in Senate seats for each State from 10 to 12 has made it increasingly unlikely that a Government with a majority in the Lower House will also have a majority in the Senate. This is borne out by the fact that no Government has had a majority in the Senate since mid Quite simply the increase in the number of Senate seats has meant that the balance of power has swung too far towards the Senate. Ultimately this is the issue that lies at the heart of concerns about resolving deadlocks in the Senate. Against this background, the BCA believes that debate could have been enhanced by also taking into consideration reform of the Constitution to alter the number of seats in the Senate and the implications of such a change. Business Council of Australia 7

8 Conclusion The BCA considers that reform of the Senate is long overdue. Governments need to be given the scope and opportunity to implement their policy agenda. That is the basis on which they were elected. The current system in practice is delivering an effective veto power to the Senate in other words the Senate has become ultimately responsible for the policy and legislative agenda. The BCA does not consider that this reflects the intended balance of power implicit in the Constitution, and does not ensure the precedence of national interest. The BCA supports the recommendation to reform section 57 of the Constitution to enable a joint sitting of the Houses in the event that legislation has been twice blocked by the Senate. However, the BCA believes that further consideration should be given to broader reform to redress the imbalance in power that has emerged between the two Houses of Parliament and enhance the effectiveness of the Senate as a house of review. The BCA has long supported a move to fixed four-year terms as a means of lengthening the time horizon of politicians and the political debate in this country. This is important to ensuring greater stability and certainty and to developing the longer term policies necessary to support a competitive and prosperous Australia. Business Council of Australia 8