Canberra, 6 September 1966
284/1491. Confidential Personal
Have discussed with Minister situation in the House of Assembly regarding the budget.1
Minister appreciates that official members are aware of the importance of the matter as affecting relationships between the House of Assembly and the Government. There are some aspects on which the Minister thinks it may be of assistance to the official members to be aware of his views.
In the present transitional constitutional stage in the Territory there is no clear cut dividing line between the responsibilities of the Government and the House. An appropriation by the House is necessary for expenditure in the Territory and clearly it is right that the views of the House should influence the budget. There is no suggestion that the intention of the constitution is that the House should be a rubber stamp in respect of the budget and the Government freely accepts this.
At the same time there are two major considerations which it is reasonable to expect the House to take into account.
The first is that under the present single budgetary system the budget is a total plan which authorises expenditure of both Territory revenues and Commonwealth grant. The Commonwealth grant has been decided upon in the light of a budgetary plan for the Territory which expresses certain principles. An important principle for example is that the resources available should be applied in a way that gives due emphasis to building up the economy of the Territory so that as soon as reasonably possible there could be an improvement in the degree of financial self-reliance by the Territory.
In the event that action were taken by the House which in the Government’s view varied in important respects the budgetary plan which was the basis of the Government decision about the level of grant, then the Government would be justified in reviewing its position in relation to the level of grant for the financial year bearing in mind that the Commonwealth parliamentary appropriation of the grant is an authority for the Government to make payments to the Territory Treasury within the limit of the appropriation and is not a direction by parliament that the whole appropriation should be paid.
This consideration should not be expressed as or regarded as a threat. It is simply a statement that since under the present budgetary arrangements the grant is determined on the basis of a particular Territory budget plan or budget strategy if the House does not accept that budgetary plan then it is reasonable that the Government should have the opportunity of reviewing its position.
The Select Committee has said that it proposes to look further at a split budgetary arrangement. If such an arrangement can be worked out and is adopted then the position will be different. But at present it is the existing arrangement which must be made to work by a reasonable approach of give and take as between the Government and the House.
The second major consideration is that any proposed budget is a co-ordinated document expressing the executive’s judgment of its requirements to keep the government machine running. There is a limit to alterations that can be made by the legislature without creating an impossible situation for those who have the responsibility for keeping the machinery of government in operation. For example if the budget provides for new schools to be built it must also provide for teachers to teach in them. If it provides for agricultural extension workers to be employed it must also provide transport for them. The different parts of the budget fit in together. To change one part can make nonsense of other parts.
This again does not mean that the House cannot have any say but that in the nature of things its say must be had mainly through those members who are appointed to take part in the consultations with the executive. This year members of the Administrator’s Council were invited to make their views known before the budget was framed. They were consulted on the draft budget as well as being shown the actual budget in advance of its introduction in the House. The Government is genuine in its wish to give the members of the Administrator’s Council a real consultative role in the preparation of the budget.
If however the situation is reached when the House makes reductions in items in the budget which in the judgment of the Administrator make it impossible to carry on the machinery of executive government with reasonable efficiency then the Government would again have to reconsider its position.
Again this does not mean that the House has no power to reduce items. The elected members have the numbers to make any decision they want. The point to be made however is that when a majority of the elected members takes a decision they should be sure that it is not going to have results which they do not intend. In other words they should act only with the fullest sense of responsibility and with a view to being sure that what they are proposing does what they intend but does not also do other things which they do not intend.
The present constitution will work only if on the one hand the Government gives the elected members proper opportunities to influence the course of events—and the Government is willing and ready to do this—and on the other hand the members of the House refrain from carrying out the use of their powers to the extent that they make the machinery of government unworkable or put the Government in an impossible position.
Thus any reductions made by the House to particular items in the present budget will be considered in the light of the Government’s view of their effect. If in the Government’s view they substantially alter the basic budget plan or budget strategy in such a way as to cut across basic policies such as that of providing economic development of the Territory or if they make it impossible to carry on the machinery of administration efficiently then the Government will not be able to accept the adjustments.
If on the other hand the effect is to express the House’s view that a certain proposed activity which is not in essence part of the budget plan should not proceed or should be modified then the decision would not be one which would be regarded as having basic constitutional implications.
The Minister sees advantage in the elected members being made aware of the above considerations. At the same time he recognises that too uncompromising a statement, particularly if presented as a ‘Canberra edict’, could do more harm than good. Consequently he leaves to your judgment and to that of the official members the use to be made of the above in the light of the situation of the House, but in any case any of the foregoing points should not repeat not be expressed or represented as coming from the Minister, the Department or Canberra.
[NAA: A452, 1966/4775]
1 During budget debate on 5 September, elected members disparaged the Administration for treating the House as a ‘rubber stamp’—with Guise and Downs reserving particular criticism for the expansion of the public service. Late in the day a motion was passed (42 to 16) calling for greater control over the budget by elected members, and Downs gave notice of a further motion that would reduce the allocation of funds for the recruitment of overseas public service officers ( South Pacific Post , 5 and 7 September 1966, NLA: NX 342).