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21 March 2014
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Parliament Brief: Government Accountability to the House

An essential function of the House of Representatives is holding the Government to account for its actions. The term ‘responsible government’ means that the Government has the confidence of the elected House from which its members are drawn. As a consequence, the Government is required to be accountable to the House.

The Executive Wing known as the ‘Beehive’ (left) and Parliament House (right)

The House has developed several mechanisms to ensure the Government is regularly held accountable. While virtually any parliamentary proceeding lends itself to holding the Government to account, these mechanisms provide structure to the accountability process. They ensure that Parliament approves expenditure for specified purposes and reviews how the money was spent.

Appropriation and supply of public funds

It is a longstanding constitutional principle that appropriation of public funds must be approved by Parliament through the passing of laws authorising expenditure. As far back as 1376 the English House of Lords and House of Commons jointly assembled to refuse supply until grievances about Court expenditure were addressed. This tactic achieved the desired result, although it took a few more years for the principle to become established. In 1380 the Speaker sought from the King’s Council a schedule of sums required – an early version of today’s Estimates.

The principle of parliamentary control over supply is recognised in New Zealand law. It is fundamental to a democratic system because it ensures the Government must retain the confidence of the House to fund its activities. It cannot remain in power if it fails to obtain supply. If, on the other hand, the Government had available to it an alternative source of supply, the House would no longer be taken seriously by the Government and be effective in counterbalancing executive power.

Several parliamentary processes are associated with financing Government activities. An appropriation, or ‘supply’ of public funds, is Parliament’s authority for the Government to spend, as set out in an Appropriation (Estimates) Bill (the Budget) or an Appropriation (Supplementary Estimates) Bill or an Imprest Supply Bill.

Not all public funds are appropriated on an annual basis. Some are subject to permanent legislative authorities and multi-year appropriations. These cover items such as the salaries of Judges, for which appropriations are for an indefinite period to ensure independence from parliamentary influence. Other exceptions to annual appropriations are funds to repay debt and funds for Treaty of Waitangi settlements. This means that defeat of the Budget would not affect those items.

The general principle that Government expenditure is not authorised for more than one year ahead offers regular opportunities for scrutiny by the House and committees as set out below.

Budget policy statement and Budget-related reports

Each year the Government is required to publish a Budget policy statement before 31 March. This contains information about short-term fiscal intentions and long-term fiscal objectives. One of the select committees of the House, the Finance and Expenditure Committee, is then required to report to the House on the statement, followed by a two-hour debate. After delivery of the Budget, the committee must also report on further Budget-related reports.

Budget

A number of documents form the Budget package. These include the Appropriation (Estimates) Bill, the Budget speech delivered in the House by the Minister of Finance, and the Estimates. The Estimates and the supporting information set out in detail how the Government proposes to spend public money in the coming year and are discussed below.

The Budget delivery has lost some of the intrigue of the past, when people rushed out to fill up the car with petrol or buy beer and cigarettes before midnight to avoid new taxes to be imposed immediately after delivery of the speech. With today’s more open approach to the Budget’s contents, much of the secrecy has gone but it remains one of the House’s ‘set piece’ events. The debate that follows delivery of the Budget lasts for 14 hours and takes precedence over all other Government business. This ensures the Budget is put under sustained scrutiny.

Estimates and Supplementary Estimates

The detailed Budget appropriations are known as the Estimates. The Finance and Expenditure Committee allocates each ‘vote’ corresponding to each ministerial portfolio to the various subject-specific select committees for closer examination (see Parliament Brief, ‘Select Committees’). Committees have two months in which to complete these examinations and to report to the House. It is common practice for Ministers to appear before committees to defend the spending proposals.

After all the Estimates have been reported to the House the Estimates debate occurs in the committee of the whole House, being the committee stage of the Appropriation (Estimates) Bill (see Parliament Brief, ‘The Legislative Process’). This is a further opportunity to hold Ministers accountable as they defend their appropriations in an eight-hour debate. It is possible, but uncommon, for appropriations to be amended during this debate. The Appropriation (Estimates) Bill then has a third reading and receives the Royal assent. Only then has Parliament approved the annual appropriations.

The Supplementary Estimates are further appropriations made towards the end of a financial year as a result of further spending requirements. They are adjustments to be approved by an Appropriation (Supplementary Estimates) Bill. There is some scope for select committee and House scrutiny, but not on the same scale as for the Budget itself.

Imprest Supply Bill

If the Government is seeking temporary authority to spend money, pending an appropriation, an Imprest Supply Bill is needed. This requires a three-hour debate in the House. Such debates, in practice, are treated as a wide-ranging opportunity to debate any current issues that might test the Government and are not limited to the specific financial details of the bill.

Financial review

An Appropriation (Financial Review) Bill is the final part of the Government’s regular financial cycle for the previous financial year. It provides for confirmation or validation of overexpenditure or previously unappropriated expenditure for that year.

The financial review process in Parliament includes extensive review of public sector performance, including Crown entities and State enterprises, by select committees and debate in the House (see below and Parliament Brief, ‘Select Committees’).

Parliamentary questions

At the beginning of each sitting day the House devotes about 60 minutes to 12 oral questions from members to Ministers about matters within their ministerial responsibility. The Ministers have a few hours’ notice to prepare a reply. After the initial reply is given, members can ask supplementary questions to test the Minister’s answer. This process keeps Ministers and the organisations for which they are responsible on notice that their activities can always be subject to scrutiny. Questions may be addressed to other members of the House (Government or Opposition) but, as compared with questions to Ministers, in much more restricted circumstances. For example, chairpersons of select committees may be questioned on the procedure being followed by their committees.

The uncorrected transcript of each question and answer, including supplementary questions and answers, is added to the website (www.parliament.nz) throughout the afternoon, as it becomes available. Questions containing Te Reo Māori are not added until their transcription and translation have been completed. The aim is to add all questions within two-and-a-half hours of the end of question time. The corrected transcripts form part of the publication of the New Zealand Parliamentary Debates.

Members may lodge an unlimited number of written questions to Ministers. Replies must be lodged within six working days. The entire process of lodging and publishing these questions is electronic. All questions and answers are published on the website www.parliament.nz.

Debates in the House

In addition to debates associated with appropriation and supply, there are several other debating opportunities in the House where the Government must defend itself. For instance, every Wednesday an hour is set aside for a general debate in which members are free to raise any issues of concern. If an urgent matter of public interest arises involving ministerial responsibility, any member can raise this with the Speaker, who decides whether it needs the immediate attention of the House. If it is accepted, one-and-a-half hours are set aside for the debate.

The House of Representatives.

There are two further ‘set piece’ debates to which the House devotes a substantial amount of time and where the Government is expected to defend its policies. The first is the Address in Reply debate. This is the means by which the House formally responds to the Speech from the Throne delivered by the Governor-General at the State Opening of Parliament when the House meets after a general election. This debate takes precedence over other Government business and lasts up to 19 hours. If there is no Address in Reply debate in progress when the House meets at the beginning of each year, the Prime Minister makes a statement to the House on the Government’s intentions for the year. The whole debate lasts up to 15 hours.

Petitions

There is a traditional right to petition the House on issues ranging from redress of personal grievances, provided legal remedies have been exhausted, to requests for a change to public policy or the law. This process can bring Government activity under close scrutiny. Petitions are referred to the appropriate select committee (see Parliament Brief, ‘Select Committees’). The committee may, for instance, ask officials from the appropriate Government department to provide a submission and to appear before it to explain the department’s actions in relation to the issue. If a committee recommends any Government action in its report to the House, the Government must respond to the House within 60 working days. Given the constraints on its time, the House is most unlikely to debate a petition.

International treaties

The Government negotiates treaties with other individual countries (bilateral) and with a number of countries (multilateral) on matters such as border security, trade, telecommunications, maritime safety, and extradition. As global communication increases, so does the need to have international agreements that then require implementation in domestic law. If Parliament had no opportunity to review such agreements its sovereignty would be undermined. It would be asked to enact an agreement that was already a ‘done deal’ and open to no further negotiation. The House has therefore put in place procedures to ensure select committees have a chance to consider treaties before they are ratified by the Government and to raise with the House any concerns they may have.

Select committee scrutiny

While debates in the House are very visible examples of Government accountability, the detailed scrutiny occurs at select committees (see Parliament Brief, ‘Select Committees’). This is where Ministers and officials attend public hearings and answer questions about their performance and policy intentions. In addition to the annual examination of the Estimates, committees also routinely examine the performance and current operations of public organisations by conducting financial reviews (see above). This provides an opportunity for detailed study and is a regular reminder to those organisations that they are publicly accountable.

Specific issues might also come to committees’ attention. Committees are empowered to initiate their own inquiries and to receive briefings on such issues. Committee findings can have a significant impact on Government operations. If a committee makes a report to the House with recommendations to the Government, the Government must respond to the House within 60 working days. It is rare for an inquiry report to be debated in the House.

Further reading

Constitution Act 1986

Einzig, Paul, The Control of the Purse: Progress and Decline of Parliament’s Financial Control, Secker and Warburg, London, 1959

Judicature Act 1908

Laundy, Philip, The Office of Speaker, Cassell and Company, London, 1964

McGee, David, Parliamentary Practice in New Zealand, 3rd edition, Dunmore Publishing, Wellington, 2005 www.parliament.nz

Palmer, Geoffrey and Palmer, Matthew, Bridled Power: New Zealand’s constitution and government, 4th edition, Oxford University Press, South Melbourne, 2004

Public Finance Act 1989

Standing Orders of the House of Representatives, 2011

(The Standing Orders of the House of Representatives are available at:

http://www.parliament.nz/en-NZ/PB/Rules/STOrders/)