Why a modern legal education should examine constraints on the Commonwealth’s spending power

Mainstream critical legal education in Australia gives little attention to enactments and case law regulating the Commonwealth’s constitutional power to appropriate (s 81) and spend money (s 83). This neglect has several causes, including a shallow knowledge base. Few legal scholars have engaged with reforms aimed at increasing the public administration of government spending, much less criticised their effects on Parliament’s spending powers. One exception is Professor Charles Lawson, who argues such reforms have undermined Parliament’s constitutional authority.

The Charter of Budget Honesty Act 1998 (Cth) (CoBHA) is a reform in point. It imposes guiderails around the Commonwealth’s constitutional spending (‘budgeting’) powers by introducing ‘principles of sound fiscal management.’ On first view, these principles seem commendable: they make government more transparent about fiscal strategy and seem broad enough to permit diverse governments to develop divergent economic policies. But the substance of these principles (including what they omit) reflects a bias towards orthodox neoclassical economic theory (eg, pro-austerity fiscal policy) and against the emergent insights of heterodox economic theory (eg, the sectoral balances approach).

Given the central role government expenditure plays in our daily lives (eg, Medicare, the NDIS) and the importance of political economics to Australian electors, a modern legal education should familiarise students with laws that may constrain or even undermine Parliament’s constitutional power to spend money (such as CoBHA), together with related case law. I contend that both constitutional law and administrative law are Priestley 11 subjects well placed to highlight these tensions in political economy and law.

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