Address to the Committee for Economic Development (CEDA)
State of the Nation Conference
Parliament House, Canberra
Monday, 22 June 2015
E & OE
Subjects: The Senate and economic reform
Well thank you very much Speaker Martin, if I could follow the American protocol and continue to call you such. Paul McClintock, Chair of CEDA, good to see you. Penny Wong. Ladies and gentlemen.
CEDA’s contention, which you would have seen in the material, is that the Senate is a battlefield. I was just joking with Penny, for those of you that are old enough to remember, it’s kind of echoes of Pat Benatar there. The other contention that CEDA has is that the Government is unable to pass any major economic reform and poses the questions, ‘What is the future of the Senate?’ ‘What is the future of reform?’ It really echoes Paul Kelly’s thesis at the moment which is that the system is broken and it is the end of reform as we know it. In essence, apart from the Senate being a battlefield, I pretty much disagree with the contention that is being put forward. Let me explain why.
I think the Senate is probably the most misunderstood of Australia’s fifteen legislative chambers; the nine lower houses and six upper houses. We do get a particularly bad wrap, not least of all from our House colleges who joke that the collective noun for a group of Senators is a soiree of Senators. And we all, of course, know of Paul Keating’s assessment of the Senate as unrepresentative swill.
I don’t think our reputation has ever been quite as bad as that of the New South Wales Legislative Council, which up until the mid-eighties had 12 year terms, no constituents, no electorate offices and not even elections. Legislative Council members were appointed on the basis of the proportion of the vote that the parties received at the preceding general election. And they got their pension after only serving one term in Parliament. So we have never had a wrap as bad as theirs. The Senate has always fundamentally been a popularly elected, democratic chamber.
I think the other misapprehension is that the Senate in some way was modelled on the House of Lords. It wasn’t. It was modelled on the United States Senate. The intention was for a strong upper house. Equal numbers of Senators from each state. The Senate being equal in power to the House of Representative in all regards except for the capacity to initiate money bills. I also think sometimes we lose sight of the fact that the Senate is a house of review. That we have sixteen purpose-designed Senate Committees. Eight Legislation Committees and eight References Committees as well as the Estimates Committees. So we do have a strong role as a house of review and we do have that important role which I think is sometimes not fully appreciated.
Change and reform in a nation with nine jurisdictions and fifteen legislatures, obviously is more challenging than somewhere like New Zealand were you have one jurisdiction and one legislature. We are different to the UK where the Lords doesn’t have the capacity to deny, it can only delay. So yes, federations are hard. It can be tough to get things done. But the governance arrangements that you have in a federation is the price that you pay for the establishment of the federation in the first place.
But elements of the Federation are periodically being refurbished and periodically being renewed. And I would not want you to have the view that the Senate in its current form is somehow pristine and in its original state. The Senate has always been evolving. And there have been complaints about the Senate since Federation. And the system of voting for the Senate has always been evolving as well. There was the first past the post system from 1902 through to 1918, where candidates were listed on the ballot paper in alphabetical order and you put a cross next to the number of candidates that you wanted to support. And it saw outcomes such as the Nationalists in 1917 winning all Senate seats.
Preferential voting was used in the Senate from 1919-1946. And there were, even under that system, electoral wipe-outs were you often had the Nationalists, as they were then, or Labor with 35 or so out of 36 seats. Proportional representation was introduced in 1949 to address these lop-sided results.
And in 1983 there were further changes. We had group voting above the line for the first time. And although that’s been available as a voting option, there are still many people who vote below the line. In fact, I have got a friend who always votes below the line using Roman numerals, from 1 to 75. And when I ask him why, he says, “well, because I can”. And at one Senate Estimates, going back, we had the Electoral Commissioner across the table and I said “Commissioner, I’ve got this mate who always votes below the line using Roman numerals” and he replied, “You know the bastard”. The Electoral Commissioner always has someone on standby to count my friend’s vote. But anyway, that’s just to emphasise that the system for voting for the Senate has always been evolving. In ’83 also for the first time, you could register preference orders. And also in ’83 probably the single most significant change in the history of the Senate was increasing the size of the Senate from 10 Senators per state to 12. That is a change which in effect entrenched, more often than not, that minor parties would have control, or the balance in the Senate.
Now as a part of good practice, the Joint Standing Committee on Electoral Matters always reviews the conduct of an election after each general election. And you would be aware that they presented a report which makes a number of recommendations that is currently being considered by Government. So I can’t tell you what the Government response will be, other than it’s currently under consideration. But, I will say this with Penny here, I have got to say, I actually prefer the current Senate to the one that was in place before the middle of last year. It’s a Senate we can do business with.
Now obviously, there is a lot of focus on the Senate, on the voting system, and yes structures do matter. But it is actually the individual players and individual personalities that I think matter much more than the structures themselves. You can have good structure, but if you have players not approaching things in a constructive way, then it doesn’t matter how good your structures are, the system won’t work. And you can have bad structures, but if you have individuals approaching the job in the right way, again the system can work. Some of the key considerations are: Is the opposition of the day being responsible? Is the Government of the day making its case well?
But regardless of the system that you have, politics is always governed by the iron laws of arithmetic. You need 50% plus 1. It does not matter if it is at a branch meeting, a preselection, a State Council, a Federal Council or the floor of the Parliament. You always need 50% plus 1. And if you do not have the numbers, you have got to get them. And in a chamber where you do not have the numbers there are relevant factors to make things work. You need a responsible opposition, you need an alternative government that is prepared to put the community interest first. And minor parties are only dealt in when the opposition of the day allows that to happen. And when the cross-benchers are dealt in, your approach is important, obviously. Talking with the cross-bench is no different to any other human relationship. You can’t deal with people were you think they should be. You can’t deal with people where you want them to be. You have got to deal with people where they are, and then work back from that point. And if you do that, you can get good outcomes.
The other important consideration, in a chamber where the Government doesn’t have the numbers, obviously, is the Government making its case for change, its case for reform. And it would be fair to say that the Government has learnt some lessons. And one of those lessons is the extent to which you release all of your significant budget measures on budget night. To some extent you constrain your capacity to present the budget measures in context. So you would have seen in the lead up to this budget we were talking much more about individual budget measures before the budget. And I guess one of the best templates is the Good and Services Tax, the New Tax System. That wasn’t released on budget night. There was a case for change made. Then the proposition to respond to the need for change. So we have learnt a little bit as we have gone.
In conclusion, just to emphasise that in the current environment we still have got significant things done. I remind you of the abolition of the carbon tax, the abolition of the mining tax, the passage of legislation to reintroduce temporary protection visas, legislation to deliver our Direct Action Policy and this week, it is looking good, for pension reform. And overall we have also passed four tranches of national security legislation. So there have been some significant achievements.
But just to put some numbers on that, since we have been in Government we have passed 234 bills in 161 packages. We have had 15 bills negatived in the old Senate, 18 bills negatived in the new Senate and that includes some measures which were subsequently passed. So yes, we have had difficulties. Yes, we have had challenges. But we have had some significant achievements get through. We do have a significant reform agenda; tax reform, the Federation White paper, our plan for Northern Australia, higher education, social welfare reform, our small business package. Not to mention things in my own portfolio like the National Disability Insurance Scheme and some significant aged care reform.
But I just want to leave you with the thought that yes, structures do matter. But I think it is the personalities and the players and how they conduct themselves that matters much more.
Thanks very much.
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