Australia 2014 Budget: What Happens Next?
You’ve heard the 2014 Australian budget controversy – it’s splashed across every newspaper, on the news, all over social media and is a hot topic at school, uni and work.
So what happens next?
Will this proposed 2014 Australian Budget ever actually become reality? Will the changes, good or bad, ever actually affect you and your family?
There is a long process of debate, changes and refinements between the proposed budget announced on Tuesday 13th May and the actual 2014 budget that will become law and affect Australian for years or decades to come.
So how does the budget process work? And what is likely to happen in the coming months?
The Budget Process
Step 1: Budget Night & The Budget Speech
On the budget release day the Treasurer briefs media and interest groups on aspects of the budget the Government has prepared. At 7.30pm, the Treasurer gives the Budget Speech which summarises the main points – expected income, expenditure and taxation measures. This speech is broadcast live from Parliament House. This is the step that occurred on Tuesday 13th May and sparked all this news and controversy.
Step 2: The Budget Debate
Now that the 2014 budget has been announced to the public, the House of Representatives will debate the details. Almost anything relating to the budget bill can be debated, in a process that normally takes weeks. They House of Representatives must vote and pass the budget bills before it can be implemented.
The Senate will also consider the 2014 Budget. They conduct hearings to investigate the expenditures and can question representatives of government departments about the proposed expenditures. The Senate must also pass the budget bills before they can come into effect.
Step 3: Final Budget Outcome
The Final Budget Outcome must be released no more than 3 months after the end of the financial year. This means it’s due by the end September 2014 at the latest. Both houses of Parliament, the Senate and the House of Representatives, need to have voted and passed the bill by this time. The Final Budget Outcome may be different to the initial budget proposed by the Government, and will provide actual financial outcomes rather than just estimates.
Step 4: Mid-Year Economic and Fiscal Outlook (MYEFO)
The Mid-Year Economic and Fiscal Outlook is an update on the economic and fiscal outlook of the budget from the previous budget. This must be released by the end of January or six months after the last budget is released, whichever one is later.
Step 5: Start Preparing the Next Budget
From September this year, the Treasurer will begin preparing next year’s (2015) budget. It will begin with asking for submissions from interested parties and receiving counsel from the community on the priorities for the next budget.
Senior Ministers’ Review
The pre-budget submissions will then be reviewed by Senior Ministers in November/December to decide on priorities for the next budget.
Portfolio Budget Submissions
Using the results of the Senior Ministers’ Review, government agencies will prepare their submissions for everything they want funded and also to outline areas of potential savings.
Expenditure Review Committee
This group, usually including the Prime Minister, the Treasurer and the Minister for Finance and Administration, plus one or two other ministers, meets in March to develop the new budget. They decide which proposals should be funded, and how much funding they should receive.
Ad Hoc Revenue Committee
The Ad Hoc Revenue Committee meets with the Expenditure Review Committee in March and April to decide on the revenue components of the budget (where the money will come from).
The final stage in the new budget creation process occurs in April. The Budget Cabinet reviews and endorses the decisions made by the Expenditure Review Committee. The Cabinet then agrees to present the budget to Parliament.
And then…we’re back to Step 1: Budget Night & The Budget Speech!
What happens if Parliament can’t agree on the budget?
The Budget Debate is the opportunity for politicians to debate and negotiate details of the budget. Normally, they will come to an agreement – a middle ground – where enough members of the House of Representatives accept the terms to pass the budget bills. The budget bills will then be passed up to the Senate, who also need to pass the bills before they can become law.
The 2014 budget has proven to be extremely unpopular and controversial. Labor, the Greens and other members of parliament have already indicated they will not support major components of the proposed budget such as changes to the pension, increased increases to the fuel excise or changes to Medicare that will require patients to pay $7 each time they visit a doctor.
This means the Government will most likely make some compromises in order to get enough support in the House of Representatives and the Senate in order to pass their budget. It is expected they will negotiate with smaller political parties like the Palmer United Party, the Liberal Democratic Party, Family First and the Australian Motoring Enthusiasts Party in order to gain the support they need.
The Double Dissolution
If the House of Representatives and the Senate can’t compromise and come to an agreement over the terms of the budget in time to meet the “Final Budget Outcome” deadline, it may lead to a Double Dissolution. In this situation, the Government can request the Governor-General dissolve both the House of Representatives and the Senate. An election would be called to elect a new Government.
After the election, the House of Representatives and the Senate would again examine and vote on the budget bills. If they still can’t pass the bills in both houses, then there would be a joint sitting and both houses of parliament would come together to vote on the bills.
If you haven’t heard of the double dissolution, it’s not surprising. The last one was called for in 1987 by Prime Minister Bob Hawke and approved by Governor-General Sir Ninian Stephen. Prime Minister Hawke was trying to introduce the Australia Card Bill 1986 but could not get it passed through the Senate. Though the Hawke Government won the election and returned to power, ultimately the bill was not successful and was abandoned.
Will we see a double dissolution?
Only time will tell! There are many hours of debate and negotiation to go before September. Our politicians may find enough acceptable compromises to pass this budget and avoid a double dissolution.
Having trouble with all these terms? Try Budget 2014: Decoding the jargon; all the terms you need to know