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Part V Separation of Powers, Ch.25 Executives

Terence Daintith, Yee-Fui NG

From: The Oxford Handbook of the Australian Constitution

Edited By: Cheryl Saunders, Adrienne Stone

From: Oxford Constitutions (http://oxcon.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 07 June 2023

(p. 587) Chapter 25  Executives

A.  Introduction

1.  Constitutions and Executives

Executives are an embarrassment for constitutionalists. The ostensibly tidy and symmetrical triumvirate of legislature, executive, and judiciary that we find in almost all modern constitutions conceals a radical difference in the nature both of the institutions so described and of the functions they are assumed to perform. The legislature and the hierarchy of courts are readily identifiable institutions, whose nature, membership, attributes, and functions the framers of the constitution have been able to define with reasonable precision. The same cannot be said of the executive. If we strictly apply the threefold division of institutions and functions demanded by traditional separation of powers thinking, every governmental function that is not assigned to the legislature or judiciary is to be discharged by ‘the executive’,1 and that executive consists of all those parts of the governmental apparatus that are not the legislature or the judiciary. The range and variety of the functions of government that cannot be assimilated either to law-making or to adjudication, and of the bodies that perform them, has in recent centuries been such that constitution-makers commonly make only skeletal provision for executive organization.2

(p. 588) The commonest approach to executive organization is to identify a Head of State—who may be a President or a monarch—and to vest executive power in that person. While such a constitution may sometimes expressly distinguish powers exercisable as Head of State from those exercisable as head of the executive,3 more commonly it does not, thereby adding further uncertainty as to the nature of executive power. Some constitutions, however, prefer a clear or partial separation of the functions of Head of State and head of the government,4 or assign President and government distinctive constitutional roles, while subjecting the government to a significant degree of Presidential supervision.5 Specific powers may be attributed to the head of government,6 but attempts at a comprehensive statement of organization are the exception rather than the rule.7 Often even basic issues like the existence of political (Ministers) and apolitical (civil servants) elements within the executive are treated obliquely, as in Germany8 and Finland,9 or ignored altogether, as in France.

2.  The Australian Constitutional Inheritance

Australia broadly follows this minimalist model, but with a complication linked to its colonial past. The approach of members of the Australasian Constitutional Convention in 1897 in Adelaide10 to the task of making appropriate provision for the structure and powers of a federal executive was shaped by their desire to maintain the United Kingdom model of ‘responsible government’, as already practised in the (p. 589) Australian colonies.11 This left them with two problems. The first, how to reconcile this principle with a federal system that implied a strong legislative second chamber to represent State interests, was not successfully addressed and continues, as other chapters in this volume show, to give trouble even today.12 The second was that a constitution describing how the executive actually operated would need to include, as fixed constitutional rules, practices as to the selection, organization, and tenure of the executive that, both in the mother country and in the colonial constitutions, had been left as ‘understandings’ according to which the formal legal structure of powers would operate: understandings which, the political historian Sidney Low contemporaneously noted ‘themselves are not always understood’.13 The framers preferred, therefore, to proceed by drafting provisions on the executive that reflected, in fairly skeletal terms, the legal relationship between monarch and Ministers in the United Kingdom as adapted for colonial use. The result is that the Constitution provides a picture of executive organization and power that is incomplete and, even though extremely brief, inexact in important respects by reason of inconsistences between expected practice and the formal text.14

In dealing with the constitutional aspects of executive organization, our aim is to demonstrate the relationship between the explicit terms of the Constitution and the way the executive is actually organized, with particular reference to the key principle of responsible government. The conception of responsible government that may be described as conventional or traditional holds that the executive must be led by Ministers who command the support of a majority of the lower (or in the case of Queensland, unique) House of Parliament, and that those Ministers must answer to Parliament for all actions of the executive, both collectively, in relation to the actions of the government as a whole, and individually, for what is done by the departments they control.15 Developments in the organization or operation of Australian executives that appear inconsistent with these notions have often been viewed with alarm. We review such developments in the Commonwealth context—there is (p. 590) unfortunately no space to discuss the situation in the States—attempting to relate them both to these conventional notions and to the broader constitutional values of democracy, effectiveness, and legality that the Commonwealth executive might be expected to further and to respect.

B.  The Constitutional Executive

1.  The Queen

The stipulations of the Constitution regarding the executive are to be found in Chapter II, in ten sections (sections 61–70), that occupy barely a page of type. Its very first phrases tell us that we cannot rely on a literal reading of the Constitution for an understanding of executive government in Australia today. ‘The executive power of the Commonwealth,’ says section 61, ‘is vested in the Queen and is exercisable by the Governor-General as the Queen’s representative.’ This first phrase of section 61 did no more than define explicitly—in a way that the colonial constitutions did not—the legal source of executive authority. Its descriptive, rather than dispositive, character is signalled by the use of the term ‘is vested’ in section 61, implying the preservation, under the new Constitution, of an existing state of affairs, in contrast to the wording of sections 1 and 71, which provide that the legislative and judicial powers ‘shall be vested’ in the federal Parliament and the High Court of Australia respectively.16 Australia’s steady progress towards independence, completed in all respects by the Australia Acts 1986,17 has shrivelled the active role played by the Queen in the government of Australia to one of appointment and dismissal of the Governor-General, in each case on the advice of the Prime Minister.18 Nonetheless, the reference to the Queen in section 61 has vital importance in relation to the extent of the executive power, in that it endows the Commonwealth (p. 591) executive with the prerogative powers that attach, under the common law, to the person of the Sovereign.19

2.  The Governor-General

The formulation of section 61 makes the Head of State also the head of the executive branch. This should not lead us to the conclusion that all the functions performed by the Governor-General, as the person by whom the executive power is ‘exercisable’ under section 61, are executive functions, as sometimes seems to have been assumed in Australian constitutional writing.20 Provision for the appointment of a Governor-General appears in Chapter I, on the Parliament, not Chapter II, and the Governor-General exercises functions under the legislative and judicial, as well as under the executive, chapters of the Constitution. The fact that all these functions are ordinarily exercised, either by express constitutional provision or by convention, on the advice of politically responsible members of the executive branch does not make them ‘executive’: they are better thought of as functions of the Head of State within a framework of responsible government. While discussions of the powers of the Governor-General tend to range across functions under all three chapters, we confine our attention here to the powers exercisable under the ‘executive’ chapter of the Constitution.

The Governor-General’s position as the effective constitutional head of the executive is implicit in the attribution to him or her in Chapter II of all the specific powers regarding executive organization and appointments. These are the powers to appoint and dismiss ‘Ministers of State’; to establish Ministerial departments (section 64); to appoint and remove all other officers of the executive government (section 67); to function as Commander-in-Chief of Australia’s armed forces (section 68); and to assume the powers of the former colonial Governors in respect of matters which, under this Constitution, pass to the executive government of the Commonwealth (section 70). Under the system of responsible government operative at the time the Constitution was framed, all of these powers, save in extraordinary circumstances (the so-called ‘reserve powers’), fall to be exercised in accordance with advice from politically responsible Ministers.21

(p. 592) 3.  Executive Councils

This basic principle has been muddled by the importation from State Constitutions of a class of powers of the Governor-General exercisable ‘in Council’, defined as powers exercised by ‘the Governor-General acting with the advice of the Federal Executive Council’,22 thereby producing two types of gubernatorial powers, those for whose exercise the advice of the Council is needed and those apparently exercisable by the Governor-General alone. The distinction was designed to reflect the distinction between ‘acts which have become, either by the general march of statute law or in any other way, nothing but ordinary executive acts’, on the one hand, and ‘acts exercised by the prerogative’, on the other.23 At the same time it was emphasized ‘that the Crown exercises its prerogative only upon Ministerial advice’.24

Section 62 provides for the creation of the Council, on a pattern familiar in the former colonies,25 and for its members to be appointed, summoned, and dismissed by the Governor-General. Ministers of State are to be members of the Executive Council (section 64). Once appointed, members of the Council normally remain so for the rest of their life, but only those executive councillors who are members of the current Ministry are summoned to advise the Governor-General at meetings of the Council.26 This includes all Ministers and Parliamentary Secretaries. The Council is not a deliberative body; it simply registers, and thereby gives legal effect to, decisions taken elsewhere, either by the Cabinet or by individual Ministers.27 Legislation, for example, often provides that regulations under it are to be made by the Governor-General in Council. If legislation simply refers to the Governor-General, it is to be ‘read as referring to the Governor-General … acting with the advice of the Executive Council’.28 Very few of the Governor-General’s constitutional powers, however, require the advice of the Council—in relation to the executive, only the establishment of Departments of State (section 64), and the appointment of civil servants (section 67).

(p. 593) The Executive Council should not be dismissed as an anachronistic irrelevance in an age of Cabinet government. It adds to the political centralization achieved through Cabinet29 an element of legal centralization, in that any decisions within a Ministerial portfolio that legislation reserves for decision by the Governor-General (which may include matters like appointments or land acquisition orders that would not necessarily pass through Cabinet) must be cleared by a Secretariat within the Prime Minister’s department in advance of submission to the Council, thus giving the Prime Minister an opportunity for review.30

C.  The Structure of the Executive

1.  The Ministry as a Whole

The Governor-General performs the constitutional role of exercising executive powers and functions through the appointment of politically responsible Ministers. Section 64 provides for the Governor-General to appoint Ministers of State to administer departments, and that these Ministers, who hold office ‘during the pleasure of the Governor-General’, must become Members of Parliament within three months of assuming office. In practice this is achieved by appointing a Prime Minister who can command the support of the lower House, and who advises on the appointment of the rest of the Ministry. The exercise of the Governor-General’s constitutional power to appoint and dismiss Ministries, in cases where the principle of acting on ministerial advice might lead to neglect either of the requirement of lower house support for the Ministry or of other imperatives such as legality of executive conduct, or capacity to govern effectively,31 has engendered continuing and sometimes bitter controversy.32 Given that these contradictions are inherent in the very notion of responsible government, it is not surprising that attempts to identify a consensus as to the conventions that should regulate these issues should (p. 594) have failed,33 lending support to those who have warned that reducing conventions to writing offers no guarantee of certainty and may, if it renders them justiciable, lead to long periods of instability.34

While the recurrence of difficulties in the exercise of section 64 powers certainly cannot be excluded, in practice the dominance of Australian legislatures by large political parties which subject their parliamentary membership to a stringent voting discipline means that in the absence of a hung Parliament, there should be no difficulty in determining who will be able to form a government that will have the confidence of the lower House. This will be the elected leader of the majority party. Each party’s approach to the election and maintenance in office of its leader thus assumes constitutional significance. In the last few years, a tension has become apparent between arrangements that provide a close reflection of the principle that the Ministry has at all times the confidence of the House of Representatives,35 and the furtherance of other values like political stability and democracy within political parties. Under the leadership election arrangements that operated, until 2013, by the federal parliamentary Labor36 and Liberal Parties, the Governor-General appointed a new Prime Minister no fewer than four times between 2010 and 2015.37 No fewer than three of these appointments resulted from a decision by a majority of the members of the parliamentary party in government that they no longer had confidence in their leader. Under the then rules, the procedures for reaching these decisions were highly informal and involved minimal notice, but might be argued to represent the state of confidence of the House—and hence to chime with the principle of responsible government—save insofar as the respective electorates included Senators as well as members of the House, so that it would be possible—though not likely—that only a minority of a party’s members in the lower House would have supported the successful candidate.

While there has been no change in the Liberal and National Party arrangements, concern about fickle parliamentary sentiment led the Labor Caucus, in 2013, to adopt new election rules in which the parliamentary vote is given equal weight with the results of a ballot of all party members, coupled with the proviso that an (p. 595) election of the party leader will only be held after an election defeat, on the resignation or at the request of the leader, or on a petition signed by at least 75 per cent of the members of the Caucus on the grounds that the current leader has brought the party into disrepute.38 This element of the change was explained as being ‘about providing the Australian public with the certainty that the person that they vote for as Prime Minister serves that term as Prime Minister’.39 While this may appear to add an attractive element of executive stability to the operation of the principle of responsibility, there must be doubt as to its capacity to keep a Labor Prime Minister in office in the face of a significant loss of confidence by the Caucus, since it remains open to Caucus to drop the 75 per cent requirement and the ‘disrepute’ criterion by a simple majority vote.40

More problematic, so far as the ‘basic principle’ of maintaining the confidence of a parliamentary majority is concerned, is the introduction of the 50 per cent weighting for votes of the wider party membership, which could easily mean that the leader was the preferred candidate of less than half of the Caucus or of its members in the lower House. A situation of this type occurred in the United Kingdom in September 2015 with the election of a Labour Party leader, by an electorate of all Labour party members under a one-man, one-vote system introduced the previous year, who had the support of only a small fraction of members of the Parliamentary party.41 The subsequent absence of any kind of Labour Party split or revolt suggests that party discipline and electoral calculation may preserve the ‘confidence’ of a majority even in a leader they would never have chosen.

2.  Ministerial Portfolios

The departments that Ministers are appointed to administer are themselves established, again under section 64, by the Governor-General in Council. After a general election or a change of Ministry the Governor-General will, on the advice of the Prime Minister, formally allocate executive responsibility through an Administrative (p. 596) Arrangements Order listing the matters handled by each department and allocating responsibility for legislation to Ministers. The effect is to create a number of Ministerial portfolios, normally consisting of a single department along with the non-departmental agencies for which it is responsible, though in some cases a portfolio may include more than one department. This is the mechanism for the practical exercise of the Governor-General’s executive power.

Section 64 may look unproblematic, but if we attempt to read it literally, in conjunction with section 61 and in the light of the notion of responsible government, difficulties emerge. The section does not contemplate any machinery other than ministerially administered departments through which the executive power of the Governor-General might be exercised. Since colonial times, however, Parliaments, including the Commonwealth Parliament, have routinely passed legislation conferring functions that are neither legislative nor judicial in character—and thus are prima facie executive—not on the Governor-General, nor on Ministers appointed under section 64, nor on officials within departments, but on statutory bodies with legal personality separate from that of the Commonwealth.42 How can this practice be squared with sections 61 and 64?43

The general answer is that if the relevant Minister to whose portfolio the legislation is assigned by the Administrative Arrangements Order can exercise some real control over the performance of the body’s statutory functions,44 the fact that these functions are entrusted to a legally distinct body has not been seen as a significant departure from the regime of sections 61 and 64 and the principle of responsible government that they embody.45

In two important classes of case, however, Parliament has largely or totally excluded ministerial control, and for very good reasons. The first type of case is where the role of the body is to provide oversight and a continuing function of review or inquiry in relation to particular aspects of executive activity. Among these the longest established and most indispensable is the Auditor-General, whose audits of departmental and agency spending, encompassing both regularity and quality of performance, are an essential support for parliamentary supervision of public finance.46 Since 1997, the Auditor-General has been appointed by, and answerable only to, Parliament: the office is clearly not part of the executive—despite the fact that the current Administrative Arrangements Order places the Act within the Prime Ministerial portfolio. Other such oversight bodies—the Ombudsman,47 and (p. 597) administrative tribunals, such as the Administrative Appeals Tribunal, providing for appeal on the merits from executive decisions (including decisions of independent regulators)48—while appointed by the Governor-General, and hence presumptively part of the executive, are either free from explicit ministerial control or—in the case of some tribunals—subject only to limited powers of ministerial direction. Since Ministers neither can nor should bear any substantive responsibility for the actions of such bodies, which some have seen as the kernel of a fourth, ‘integrity’, branch of government,49 they are best viewed as falling outside the ambit of section 64 and as embodying an alternative support for responsible government.50

The second type of exclusion of ministerial control arises out of the co-operative federalism arrangements that have been the means of pursuing coherent national policies across the borderlines of Commonwealth and State competences.51 Such arrangements may involve the exercise by State authorities of executive powers created by Commonwealth legislation.52 Here the only role that can be plausibly be ascribed to Commonwealth Ministers may not be executive, but legislative: advising on and promoting the possible amendment or repeal of the legislation. When the constitutionality of a legislative provision of this type was challenged on the ground that it entrusted to State officers ‘a function forming part of the executive power of the Commonwealth which by Chap. II must … be exercised by the Governor-General and the Ministers and officers appointed in accordance with its provisions’, the High Court refused to be bothered by the difficulties of fitting such co-operative arrangements into the Constitution’s separation of powers structure, and held that the use by State officers of the relevant powers involved an ‘independent responsibility’, not the executive power of the Commonwealth.53 The executive power exercisable by the Governor-General does not, apparently, occupy the whole of the governmental space that is neither legislative nor judicial.

The Court has taken a similarly pragmatic view on another issue raised by the wording of section 64. In providing that Ministers ‘administer … departments of State’, the section arguably requires that each Minister must be appointed to administer a department,54 casting doubt on the position of Members of Parliament who (p. 598) from time to time since federation have been called on to serve as junior or assistant Ministers under various titles, most recently ‘Parliamentary Secretary’, with the job of assisting the Minister in charge of the department. This has led to concerns that junior Ministers could not be safely paid anything above their Member’s salary; otherwise, not falling within section 64, they would be ‘holding an office for profit under the Crown’ in contravention of section 44 of the Constitution and be liable for disqualification from Parliament under section 45.55 The Court resolved the problem in 2001, confirming that it was constitutionally permissible for multiple Ministers to be appointed to administer a department, including Assistant Ministers or Parliamentary Secretaries.56 A majority held that that the executive should be given the flexibility to organize its own administrative arrangements in the interests of good government, and there was no derogation from responsible government as both Ministers would remain answerable to Parliament. The Ministers of State Act 1952 (Cth), as amended, currently provides for a maximum of twelve Parliamentary Secretaries and thirty other Ministers, all of whom are treated as ‘Ministers of State’, to whom section 44 does not apply.57

3.  Ministerial Advisers

Ministerial advisers have become major institutional actors within the executive, interposed between Ministers and public servants. These advisers have partisan and political roles, as distinct from the theoretically impartial public service. In the Commonwealth their employment is authorized by legislation.58 Ministers have complete discretion on how to structure their ministerial offices; for instance, a Minister whose portfolio includes more than one department may choose to have advisers separately assigned to different departments, or alternatively have advisers advising the Minister on particular matters across the whole portfolio.

As the existence of ministerial advisers post-dates the Constitution, their position within the constitutional structure is uncertain. There have been complaints about ministerial advisers going beyond their assigned role of advising Ministers and improperly directing public servants, acting without the authority of their Minister, or engaging in political manoeuvring to the detriment of their Minister.59(p. 599) Ministerial advisers have also been used as scapegoats to enable Ministers to evade political responsibility to Parliament in incidents like the ‘Children Overboard’ affair,60 where Ministers forbade their advisers from appearing before parliamentary committees, claiming that there was a constitutional convention that ministerial advisers do not appear.61

4.  Ministers: Control and Delegation

The traditional conception of ministerial responsibility under which Ministers answer to Parliament for all actions of their department implies a strong hierarchical structure where control over all decisions can if necessary be exercised at the top and the relevant information can be readily transmitted up and down. The idea that responsibility implies ministerial resignation in the case of departmental errors, including those that Ministers did not authorize or of which they were not personally aware has never held sway in Australia.62 In such cases the Minister’s responsibility is generally limited to explanation, justification, remedial action, or (sometimes) apology, with no requirement for resignation.63 Guidance issued to Ministers of the Howard government in 1998 brought home the corollary of this limitation, stating that where Ministers:

neither knew, nor should have known about matters of departmental administration which come under scrutiny it is not unreasonable to expect that the secretary or some other senior officer will take the responsibility.64

Though this guidance has been superseded,65 this idea of a division of responsibility within departments between Ministers and senior public servants clearly prevails today in executive practice and indeed is reflected in legislation. There is a marked contrast here with the older notion, which received judicial endorsement in the Carltona case in 1943, that decision-making public servants acted as the ‘alter ego’ of their Minister, but the Ministers retained legal and political responsibility for those decisions.66 Ministers, the court said, may have agents who are authorized to carry (p. 600) out certain tasks without having a formal delegation to do so. The agent’s decision is deemed to be the Minister’s decision.

The Carltona principle was a pragmatic recognition by the judiciary of the need for efficiency in the functioning of the State by means of comprehensive informal delegation of decision-making power. Howard’s guidance, however, reflects a continuing move towards much more formal delegation and distribution of departmental powers and functions. Formal legislative delegation provisions can provide Ministers with the ability to delegate their powers,67 or specify that a senior public servant is to exercise powers under statute.68 It is now evident that the conception that public servants are merely the extension of the Minister no longer holds true in practice. Their relationship has evolved into the ‘delegated agency bargain’, where the political principal and public servant agree on a framework set by the principal, where the public servant is given ‘a zone of discretion … in exchange for direct responsibility for outcomes within that zone of discretion’.69

Australia has participated in the worldwide trend, commenced in the 1980s, towards a ‘New Public Management’ (NPM), premised on a reconceptualization of the way governments should be managed, with an increased focus on reducing costs, managing programmes more efficiently, and making public service managers more accountable for results.70 NPM in Australia has certainly produced important executive changes, which we discuss below,71 but Australia has not followed the United Kingdom example of systematic separation between service delivery functions and policy functions within departments, which has produced a large array of ‘executive agencies’ whose civil service heads work to performance targets framed in contractual language, but which remain subject to the policy direction of Ministers.72 In the Commonwealth, this NPM-driven division between policy and management functions has found legislative expression in the financial management and public service frameworks. In relation to the management of personnel, financial, and other resources, the most senior public servants, departmental secretaries, are now legally responsible ‘under the Agency Minister … for managing the Department’ and ‘advis[ing] the Agency Minister in matters relating to the Department’.73 Under the Public Governance, Accountability and Performance Act (p. 601) 2013 (Cth) (PGPA Act), which provides a comprehensive regime for the management of public funds and other resources, the Secretary is under a duty to ‘govern’ the department so as to promote the proper use and management of public resources, the achievement of its purposes, and its financial sustainability.74 In contrast to the Public Service Act, these are not duties ‘under the Minister’; instead, the Act regulates the obligations of the Secretary in relation to communications with the Minister.75 This, the Finance Minister assured Parliament, ‘reflects notions of responsible government as a Minister must be able to know what is occurring in his or her portfolio given he or she will be held accountable in Parliament’.76 These provisions mark the distance travelled in the last few decades from notion of the public servant as the mere alter ego of an omnipresent Minister to a mode of governance in which the activity of portfolio Ministers is focused on policy direction, on securing a fair share of legislative and financial resources, and on public and Parliamentary representation.

5.  Secretaries and the Senior Executive Service

Departmental secretaries sit at the apex of the public service employment hierarchy. Secretaries are appointed by the Governor-General in Council,77 The Senior Executive Service, comprising deputy secretaries, associate secretaries, and assistant secretaries, forms the next level of seniority below departmental secretaries.78

The 1950s and 1960s were seen to be the ‘heyday of the mandarin’.79 In this period, the position of the departmental secretaries and senior officials was strong. Under the Public Service Act 1922, they had tenured positions that could not, with limited exceptions, be terminated unilaterally. However, changes in the governance and legislative framework of the public service have reduced the employment security of secretaries and senior officials. The Public Service Reform Act 1984 removed the tenure of departmental secretaries and introduced limited term appointments for the newly created Senior Executive Service. By 1994, all Commonwealth secretaries were employed on fixed-term contracts of up to five years.80 In addition, their appointments can be terminated at any time by the Governor-General acting on the advice of the Prime (p. 602) Minister.81 In 1996, the newly elected Howard government terminated the contracts of six departmental secretaries, one-third of the total, as soon as the government was sworn in.82 This exercise was repeated, less dramatically, by the incoming Abbott government in 2013.83

In contrast to the United Kingdom, where civil service employment was a prerogative matter until 2010,84 public service employment in Australia has long had a legislative basis. Section 67 of the Constitution provides for the appointment and dismissal of public servants by the Governor-General in Council until Parliament otherwise provides. Parliament has otherwise provided by the enactment of public service legislation soon after the inception of the Commonwealth in 1902.85 Australian courts have held that the Australian public service legislation supplanted any operation of the common law right to dismiss a Crown servant ‘at pleasure’ without any notice or reason.86 The relationship between public servants and the executive is thus governed by the provisions of public service legislation. Invalid termination of employment could lead to damages for repudiation of the employment contract.87 In addition, the Full Federal Court has held that Ministers have to comply with procedural fairness in terminating the employment of secretaries under public service legislation, including providing a reason for the termination.88 However, this reason did not have to be shown to be well-founded. Although this is appropriate given the nature of judicial review as being about the procedure rather than the merits of a decision, it illustrates the tenuous nature of the employment of secretaries: the dictates of efficiency have triumphed over the ideal of public service permanence.

6.  Agencies

The NPM movement also accelerated a long-standing process of moving functions from multi-purpose departments to agencies with more closely defined roles.89 As (p. 603) a result, the public sector governance structure in the Commonwealth and States now encompasses a plethora of diverse entities, from commissions, boards, and authorities, to government-owned corporations. As of September 2015, there were 179 Commonwealth entities and companies with a diverse range of functions, from asbestos safety and eradication, to offshore petroleum safety, to Indigenous land acquisition and management.90 Broadly speaking, these fall into the following categories:

  • •  executive agencies (established under the prerogative or public service legislation);

  • •  statutory authorities; and

  • •  corporations formed under corporations legislation that are government-owned or controlled.

At the one end of this broad spectrum, there are administrative units within government departments with reporting responsibilities to the departmental secretary, such as the National Offshore Petroleum Titles Administrator, which is a part of the Commonwealth Industry Department but with assigned statutory responsibilities.91 At the other end of the spectrum are corporate bodies with complete financial independence from the executive that are not subject to ministerial direction.

Despite the problems of fitting them into the structure of Part II of the Constitution,92 statutory authorities or government-owned corporations have long been used in Australia to remove areas of executive activity from departmental management or control.93 Governments establish these structures to lessen ministerial responsibility for certain activities, to avoid rules relating to government employment, to create a more efficient operating regime, or to handle technical or regulatory activities involving long-term interests that should be insulated from short-term political manoeuvring, such as the operation of the Reserve Bank and the regulation of public utilities.94

From the traditional perspective of ministerial accountability for all matters within their portfolio, statutory authorities and government-owned corporations involve a loss of power or control by Parliament, corresponding to the loss of comprehensive ministerial control through a departmental hierarchy. As we have seen, however, such comprehensive ministerial control may be more imaginary than real, and its loss may be amply compensated by freedom from inappropriate political pressure, reinforced reporting requirements, enhanced audit supervision, (p. 604) and better-focused activities under clear statutory mandates. The extent of the loss depends on the statutory regime. Statutory authorities can be subject to general ministerial direction and control, where the Minister has the power to give general directions relating to policy and practice, but cannot give a specific direction as to how the authority deals with a particular issue.95 Alternatively the body can be subject to broad direction or control by the Minister.96 A higher degree of ministerial control would mean that an aggrieved person can claim remedies through judicial review under sections 75(v) or 75(iii) of the Constitution.97 A power of ministerial direction may be accompanied by a requirement to publish the direction in the Gazette or an annual report, or table it in Parliament,98 which provides an avenue for parliamentary scrutiny.

From the point of view of accountability for finance, the use of resources, and performance more generally, the distinctions between different types of entities, from conventional departments to agencies and Commonwealth corporations, have been significantly reduced by the PGPA Act 2013, merging the formerly separate accountability regimes for corporate and non-corporate bodies.99 The Act makes distinct provision only for Commonwealth companies subject to the disciplines of the Corporations Act 2001 (Cth).100 Even these companies, however, are to be subject to audit by the Auditor-General, who is the auditor for all other Commonwealth entities.101

All entities are classed either as non-corporate Commonwealth entities—such as departments and non-statutory agencies that are legally part of the Commonwealth—and corporate entities, that by reason of their legislative foundation enjoy separate legal existence. Subject to minor differences reflecting legal status, the same accounting and reporting controls apply in relation to both types of body, as do many of the personal duties relating to management of resources imposed on those controlling the entity’s operations and on their staff.102 The considerations that might have prompted resort to corporate status—such as the need for independence—are recognized by provision that government policies can override the governance duties of heads of corporate entities only if imposed by a formal order made by the Finance Minister.103 Requirements for the presentation of (p. 605) all entities’ budget statements and annual reports and financial statements within the documentation provided by each portfolio within the budget cycle means that Parliamentary capacity for scrutiny of agency activities should not differ significantly from that applicable in relation to departments.104 Parliamentary committees may also conduct investigations of agencies outside the budget framework,105 and Ministers can be asked questions in Parliament about the operation of statutory authorities and corporations within their portfolio. Furthermore, agencies are subject to broader public law accountability mechanisms, such as investigation by the Ombudsman and Freedom of Information legislation.

7.  Contracting Out

Over the years, there has been an increasing incidence of contracting out or outsourcing of governmental functions, as well as the creation of public-private partnerships. Areas affected include public transportation and even coercive functions such as immigration detention centre management. The key issue is whether public law accountability mechanisms should apply to private agents who provide contracted out services to government. Two main responses in public law can be envisaged. The first is to draw a bright line around functions appropriate only for public performance—such as those involving coercive acts—and to prohibit private actors from operating in this area.106 No such attempt has been made, whether by constitutions or by legislation, in Australia.107

The second response is to expand the ambit of ‘public law’ obligations so as to regulate the behaviour of private actors performing public tasks.108 However, thus far, the ambit of judicial review in Australia has not extended to private bodies, which means that the public is deprived of the opportunity to challenge decisions made in the public sphere by private bodies. Corporate entities are not susceptible to judicial review as they have been held not to be ‘officers of the Commonwealth’ under section 75(v) of the Constitution.109 There is still no High Court authority (p. 606) as to whether an independent contractor may be subject to constitutional judicial review where executive or statutory authority has been contracted out to it.110 In NEAT Domestic Trading Pty Ltd v AWB Ltd, a majority of the High Court held that decisions made by non-statutory corporations were not judicially reviewable under the Administrative Decisions (Judicial Review) Act 1977 (Cth),111 meaning that such review can be easily excluded by outsourcing functions to non-statutory corporations. The availability of common law review is also doubtful due to uncertainty over whether the more permissive British approach in R v Panel on Take-overs & Mergers; Ex parte Datafin applies in Australia.112 We thus conclude that the prospects of judicial review for outsourced functions are grim.

Despite the paucity of judicial review as a result of ‘contracting out’, there are other accountability mechanisms that constrain private sector contractors. Private contractors have to meet service delivery standards and key performance indicators in their contract with government. However, aggrieved persons will not be able to directly enforce a contract with a government contractor to which they are not parties, meaning that the accountability of the contractor depends on the relevant government agency vigilantly monitoring service delivery and enforcing any breach of contract.113 Tort law may also be a useful accountability mechanism for outsourced functions, as Finn J in S v Secretary, Department of Immigration and Multicultural and Indigenous Affairs held that the Commonwealth owed a non-delegable duty of care to immigration detainees, including for their psychiatric care, although the functions had been outsourced to a private corporation.114 The existence of such a duty had, however, been conceded by the Commonwealth.

There are additional public law mechanisms covering government contractors. Parliamentary committees may choose to scrutinize government contracting. The Commonwealth Ombudsman has jurisdiction to investigate private entities that provide goods and services to the public under a contract with a government department or agency,115 and the Auditor-General has since 2011 been empowered to conduct performance audits of government contractors, with broad powers to (p. 607) compel the production of documents from Commonwealth contractors and to enter the premises of these contractors.116

The enhanced external oversight has been accompanied by increased disclosure requirements. Ministers are required to disclose details of government contracts under a Senate Order,117 while the Auditor-General is required to audit and report to Parliament annually any inappropriate use of confidentiality clauses in a sample of government contracts.118 There is a public right to access information by government contractors relating to government services through Freedom of Information (FOI) legislation.119 Despite this, FOI requests can be circumvented if a government overzealously utilizes the ‘commercial in confidence’ exemption.120

Outsourcing thus clearly—and deliberately—reduces traditional hierarchical control by Ministers, and this also brings a reduction of individual challenge and redress through judicial review. Accountability has shifted towards the new locus of contractual control. Deficiencies in contractual mechanisms have led to increased oversight through the Ombudsman and Auditor-General, bolstered by increased public access to information. This continual reconfiguration of accountability mechanisms is likely to persist in the shifting sands of the modern regulatory environment.

D.  Control and Co-ordination

1.  Political: Prime Minister and Cabinet

Among structures for co-ordination within the executive, the most important is Cabinet. In the Commonwealth, Cabinet comprises senior Ministers while, in the States, all Ministers are part of Cabinet. Cabinet determines high-level strategies and policies, and agrees on legislation and financial expenditure. Certain issues may be considered by Cabinet committees; however, decisions reached in committee are generally brought before the full Cabinet for endorsement.121 Occasionally Cabinet will authorize a Cabinet committee to make the final decision on a matter (p. 608) for security or practical reasons.122 Cabinet committees are generally established over a subject area (such as national security) or a function of government (such as expenditure).123

As already noted, while the Executive Council has purely formal functions, it may contribute to central control of governmental action.124 Substantive decision-making power, however, lies in Cabinet. Despite this, all Australian Constitutions, except Queensland’s,125 are silent on the existence of Cabinet. The constitutional silence has led Bowen CJ to note that the federal Cabinet was a ‘body which functions according to convention’ and is ‘not in any formal sense the Executive’.126 Cabinet is yet another example of the divergence between rhetoric and reality in the constitutional executive.

The Cabinet Secretary, an elected politician, co-ordinates Cabinet business. Cabinet is administratively supported by a Cabinet Secretariat of public servants located within the Prime Minister’s Department. All Cabinet submissions by line agencies are cleared through the central agencies (Prime Minister’s Department, Treasury, and Finance Department).127 Cabinet Secretariat co-ordinates input from the policy areas within the Prime Minister’s Department and the other central agencies, who comment on each proposal to ensure consistency between the policies advanced by line agencies. This is a mechanism for central policy control by the Prime Minister to advance the ‘whole of government’ catch-cry. There are no legal powers underpinning the co-ordinative functions; rather these highly formalized processes are conducted in accordance with the Cabinet Handbook, which seeks to codify the conventions surrounding Cabinet.128 It is Ministers, however, who have the legal power to administer their departments by virtue of section 64 of the Constitution, the Administrative Arrangement Orders, and enabling legislation. Political scientists have identified an increasing ‘presidentialization’ of Australian Prime Ministers, who seek to centralize power and control their Ministers through the mechanisms of party discipline, the enlargement of their own Department, and centralized media management.129 This process is underpinned not by law or by the Constitution, but by the Prime Minister’s capacity to make and unmake (p. 609) Ministers through the provision of advice to the Governor-General;130 the limit—a very real one, as we have seen—is the need to retain the confidence of their parliamentary party.

Ministers’ discretion as to how they run their portfolios is further restricted—and substantially so—by central control over the money and the rule-making powers that they need.131 In each of these cases, explicit constitutional provisions represent only the tip of an iceberg of extensive and detailed controls.

2.  Financial: Budgets, Appropriations, and Continuing Financial Control132

At the Commonwealth level, the centralized character of the public finance and expenditure system is constitutionally expressed and guaranteed by the requirements that all revenues or moneys raised or received by the Commonwealth executive government should form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth (section 81), and that no money shall be drawn from the Commonwealth Treasury except under appropriation made by law (section 83). While the term ‘Consolidated Revenue Fund’ may suggest the existence of a single government bank account into which all funds flow and from which all expenditure of departments and agencies is financed, the Fund has from the very beginning been essentially an accounting device, and today Commonwealth money may be held not only in the Commonwealth’s Official Public Account with the Reserve Bank of Australia but also in a wide range of bank accounts held by departments and agencies.133 Use of these accounts is, however, still subject to the overriding principle ‘that once moneys are received by the Commonwealth they are not expended except under the authority of Parliament’.134 This principle is crucial to the central control of executive activity, since it implies that the funding that sustains both existing and new activities of departments and agencies must be the subject of annual approval, or at least review, by the central executive bodies responsible for the presentation of the budget to Parliament.

(p. 610) Legislative power over the purse is a traditional, and fundamental, guarantee of responsible government, ensuring that a Ministry that has lost the confidence of the relevant House (or Houses) of Parliament will not find it possible to continue to govern. It is of course also necessary that the duration of legislative appropriations should be limited, as English Parliaments learned to their cost when they granted monarchs lifetime supply,135 but the principle of annual appropriation is only obliquely recognized by the Australian Constitution, which refers in its sections 53 and 54 to the appropriation of revenue ‘for the ordinary annual services of the Government’ for the purpose of allocating powers over spending legislation between the House of Representatives and the Senate.136 The framers clearly assumed that, following British parliamentary practice, the great majority of government spending would be the subject of annual appropriation. While no limit was set by the Constitution on the ability of Parliament to make permanent appropriations,137 it was assumed by commentators that such an approach would not be favoured, ‘because it removes expenditure from the annual supervision and control of Parliament’.138

Today spending covered by annual appropriations accounts for no more than 20–25 per cent of the total. The rest derives either from standing (sometimes called ‘special’) appropriations, accounting for up to 80 per cent,139 which do not require annual approval, or by funds directly received by departments, for example as fees and charges.140 Standing appropriations are created by substantive statutes for particular purposes, such as funding road-building or old age pensions and other social security payments, and may be open-ended in that the amount appropriated for a particular purpose is determined by the eligibility of citizens to the entitlements (p. 611) and other provisions in the relevant Act. While a 20 per cent annual appropriation, which covers day-to-day departmental expenses, is doubtless sufficient to ensure that government cannot operate without the continuation of parliamentary supply, the massive resort to standing appropriations greatly reduces the coercive scope of Parliament’s annual appropriation procedures.

For Parliament, the day-to-day importance of sections 81 and 83 lies in their support for securing the full accountability of the executive for policy and administration through scrutiny of its spending proposals and accounts. This depends less on the notional ability to cut off tranches of funding than on the adequacy of the information provided by government, through the annual budget process, in support of its spending plans and in their retrospective justification. In formal terms the key element of this process is approval by both Houses of the two annual Appropriation Bills, No 1, covering the ‘ordinary annual services of government’,141 and No 2, covering sums requiring appropriation that do not fall within this category, such as capital funds, grants to States, and ‘administered’ funds for new policies. These Bills, however, provide little detailed information, and from the accountability point of view the most important documents are the Budget Statements for each portfolio (Portfolio Budget Statements or PBSs), presented as part of the budget documentation and including detailed spending plans and performance targets. Such accountability is reinforced by the provision of departmental and agency annual reports and financial statements relating to performance of the previous year’s PBS. The Appropriation Bills and the PBSs represent the outcome of a process of portfolio bidding and central allocation which has gone on within the executive over the previous few months, and which is a major determinant of what new departmental policies get funded. It is the PBSs that are examined in detailed inquiries by the Senate’s eight standing legislation committees, in which Ministers and senior public servants will be questioned.142

Since the end of the twentieth century successive Ministries have devoted much effort to improving the effectiveness of use of public funds by departments and agencies by giving them greater responsibility for their own budgets. The key change occurred in 1999–2000 with a switch from the cash budgeting that operated—with some modifications—since 1901 to a system of ‘accrual output budgeting’, which conceptualized the budget process as one in which departmental and agency appropriations represent payments by the government for services provided or contributions to agency capital, with agencies enjoying broader discretion in the use of funds, and with performance evaluated by reference to agencies’ success in (p. 612) delivering the outcomes with which the payments were associated. Switching from a cash to an accrual basis, reflecting the commitments that might be made in the course of a year rather than the cash actually paid out, also meant that departments and agencies could carry over unspent funds at year-end.143

The change of approach had an immediate effect on parliamentary control. The outcomes that departments and agencies formulated for themselves were of diverse and often very high levels of generality. This impaired the search for effectiveness and efficiency, by making it very hard to form any useful view of success in achieving them and, when they were incorporated into the Appropriation Act schedules in place of the previous programme-based classification of funds, damaged the basic principle of regularity of expenditure: it became difficult if not impossible to determine whether a given employment of funds was or was not related to a specified outcome. The latter problem was exacerbated by the ruling of a majority of the High Court in Combet v Commonwealth that spending under appropriations for the ordinary running costs of departments and agencies in relation to existing policies (covered by Appropriation Act No 1) did not need to be related even to the outcomes that were specified in the Act.144 The succeeding government stated, in response to a Senate Committee recommendation that any approved expenditure should be legally linked to and connected with a specific outcome or purpose, that this ‘represents a statement of government policy’;145 but no relevant change has since been made in the drafting of the annual Appropriation Bill No 1,146 so that the Combet ruling would still appear to apply.

Further review and reform of the new system undertaken during the Labor government’s period of office from 2008 to 2013, coupled with greater familiarity with the system on the part of departments and agencies, have ameliorated some of the other initial difficulties.147 Outcomes are being stated more consistently and precisely; visibility of spending under special (standing) appropriation has been improved by the inclusion of relevant tables in PBSs and on a whole-of-government basis. Further, the 1999–2000 policy of giving departments and agencies more (p. 613) flexibility in the management of funds has been cut back, notably by reversing the practice of including provision for depreciation in capital appropriations, which enabled departments and agencies to accumulate substantial balances over time which they could apply as they wished.148 The current approach is a mixture of accrual and cash budgeting, in which appropriations cover the commitments which are expected to generate cash expenditures in the current and also future years.149 It remains to be seen whether this latest regime achieves the right balance between the improvement of performance through agency financial responsibility and discretion, and the controls necessary to ensure transparency and accountability in the service of responsible government.

3.  Control of Regulatory Activity

While money, as a departmental resource, has been centrally controlled for more than a century, it is only recently that attention has been paid to another source of power, rule-making: whether through proposals for legislation, use of formal regulatory powers, or the promulgation of ‘soft law’ such as guidance and codes of conduct. In the last two decades all Australian governments, individually as well as collectively through the Council of Australian Governments,150 have developed arrangements designed to ensure that rule-making is approached on rational lines and according to procedures that take affected interests fully into account. These reforms, developed within rather than imposed upon executive government, reflect a global movement towards so-called ‘good’ or ‘better’ regulation, associated in its earliest years with the move from public provision of public utility services to public regulation of private provision, but later expanded to a concern with the necessity for, and quality of, all regulation imposing significant costs on non-public actors.151

The control space these measures currently occupy was not previously wholly vacant in Australia: Parliaments have long-established mechanisms, of varying degrees of efficacy, for examining rule-making in the form of subordinate legislative instruments and drawing attention to unusual or irregular use of the delegated rule-making power;152 while there has been at least the possibility of review of any rules emanating from departments taking the form of regulations to be made by the Governor-General, which will need to pass through Executive Council by (p. 614) reason of provisions in Interpretation Acts.153 Both these types of mechanism, however, operate ex post facto, and standards of regulatory quality have been either absent (from intra-governmental consideration) or highly specialized (in the case of Parliamentary scrutiny committees).154

The Commonwealth’s ‘Better regulation’ programme seeks to fill these gaps by way of a suite of measures including:155

  • •  identification of the types of measures to which the programme applies, with the specification of very limited exceptions (notably, manifesto commitments);156

  • •  substantive and procedural requirements for relevant rule-making, notably the provision of a Regulatory Impact Statement that evidences objective assessment (by way of cost-benefit analysis where possible) of the need for regulation; consideration of a range of possible regulatory techniques; identification of affected interests and appropriate consultation with them;

  • •  creation of a central unit, the Office of Best Practice Regulation within the Prime Minister’s Department, to supervise compliance with the requirements and to provide advice and guidance to relevant agencies; and

  • •  procedures for enforcing agency compliance with the process, such as publication of non-compliant Regulatory Impact Statements.157

These programmes have attracted criticism principally from groups likely to favour increased regulation of economic and other private actors, in particular on the ground that cost-benefit analysis is likely to introduce a bias against valuable regulation because costs are more easily quantifiable than benefits.158 A more pertinent concern for the purposes of this chapter, however, is the tension between the values of efficiency, effectiveness, and freedom from unnecessary intervention that the programmes embody and express, and the considerations that often drive departments, and in particular politically responsible Ministers, to propose new regulation. Notable among these is the need to be seen to be doing something decisive in (p. 615) response to media or Parliamentary pressure based on alleged regulatory failures, but Ministers may also see regulation, or its revision, as a means of rewarding elements of their local or political constituency. In either case, considerations of objective necessity or appropriateness may get short shrift in internal discussion, and the ‘better regulation’ system may represent nothing more than a challenge to public servants to construct arguments and documentation within its parameters that lead unerringly to the course of action the Minister wanted in the first place. Cursory analysis of the key documents (Regulatory Impact Statements or Assessments)159 suggests while ‘better regulation’ may have had a generally positive, though not dramatic, effect, this tension between political responsiveness and regulatory effectiveness remains unresolved.

E.  Conclusions

The constitutional significance of the arrangements and developments discussed in this chapter cannot be appropriately measured by reference either to the slenderness of the place they occupy in Australian constitutional documents, or to the rarity of their consideration by the High Court. This limited constitutional visibility reflects the necessity for flexibility in the management of that mass of governmental activities that cannot be slotted neatly into the ‘legislative’ and ‘judicial’ boxes.160 The traditional panacea for this relative absence of formal constitutional structure and of judicial oversight has been the invocation of responsible government, and more particularly of the idea of ministerial responsibility, as the source of a dynamic and continuing control, better suited than constitutional stipulations and judicial enforcement to secure limited government without impairment of necessary executive flexibility. For many decades now, however, public actors and academic commentators have bewailed the inability of Parliaments to reconcile the effective performance of this role with the loyal support of a majority for the executive government of the day.161 There could be no clearer demonstration of the consequent supineness of the Commonwealth Parliament, at least, in its approach to this control function than its willingness to pass, virtually without debate and indeed with (p. 616) the active co-operation of the opposition, the legislation intended to reverse the first Williams decision.162

If therefore our review of how executives are currently structured suggests that some recent developments may not fit well with traditional modalities of ministerial accountability, this should not be taken, without more, as a ground for criticism. The important thing is to ascertain the existence and effectiveness of all applicable channels of accountability, with a view to determining how far they sustain responsible government in the broad sense: that is to say—to quote one of Australia’s constitutional founders—a system of which ‘[t]he effect is that the actual government of the State is conducted by officers who enjoy the confidence of the people.’163 The component parts of the executive are today subject to a range of diverse but interlinked accountabilities that stand outside the traditional parliamentary and judicial channels but that may likewise be the means of controlling executive action or exposing it to public scrutiny. Examples touched on here include party structures, agency reporting and accounting obligations, centrally imposed budgetary and regulatory disciplines, direct legal obligations and constraints imposed on agency boards and departmental managers, along with the components of the so-called ‘integrity branch’ of government.164 If we recognize this, we should be able to form a more comprehensive and balanced picture of the constitutional implications of a constantly changing executive structure. The picture will not always be satisfactory—accountability for contracted-out functions may provide an example—but it will at least not be distorted by an anachronistically narrow view of the means by which the people’s confidence in the executive may, today, be informed.


1  As the High Court acknowledged in Williams v Commonwealth (No 2): ‘the executive power is all that power of a polity that is not legislative or judicial power’ (2014) 252 CLR 416 [78] (partially accepting a proposition put in argument by the Commonwealth).

2  The same is true of executive powers, which are the subject of a separate chapter.

3  See, eg, Constitution of the Republic of South Africa, No 108 of 1996 (1996), ss 83, 84, 85.

4  Germany, Iran, Italy, and Japan take this position: see, respectively: Deutsche Bundestag, Basic Law for the Federal Republic of Germany [1949], (2010) chs V (the Federal President) and VI (the Federal Government); Iranian Constitution of 24 Oct 1979, under which executive power is vested in the President (ch IX), beneath the Supreme Ruler as Head of State (ch VIII); Constitution of Italy (1947): the president is head of State, art 87 and appoints the government but is not otherwise identified with the executive (a term not used in the Constitution: see art 92 on the ‘government of the Republic’); Constitution of Japan (1946): Emperor is the (ceremonial) Head of State (ch I), while the executive power is vested in the Cabinet (ch V).

5  Constitution of Senegal (7 January 2001, as amended), under which the President determines the policy of the nation (art 42) while the government conducts and co-ordinates it (art 53).

6  Germany, (n 4) art 65 (Chancellor); Constitution of the Fifth French Republic (4 October 1958), art 21 (Prime Minister). See also the Finnish Constitution, Ministry of Justice, The Constitution of Finland (11 June 1999, 731/1999), s 66 (Prime Minister).

7  For examples see South Africa, (n 3) chs 5, 10, and 11, and the (very lengthy) 1991 Constitution of Colombia, Titles V and VII.

8  Federal civil servants are referred to as being appointed by the President (art 60), but do not form part of the federal Government (ch 6), and their position in relation to it is not defined: (n 4).

9  Civil servants are not mentioned in ch 5 (The President of the Republic and the Government), but are stated (s 118) to be ‘responsible for the lawfulness of [their] official actions’: (n 6).

10  A previous Convention, held in 1891 in Sydney, produced a draft Bill that failed to gain acceptance in the colonies but provided a starting point for the 1897 discussions.

11  Michael Crommelin, ‘The Executive’ in Gregory Craven (ed), The Convention Debates 1891–1898: Commentaries, Indices and Guide (Legal Books 1986) 136–45.

12  See Chapter 24 ‘Parliaments’ and Part VI ‘Federalism’.

13  Sidney Low, The Governance of England (T Fisher Unwin 1904) 12. It is worth noting that nearly a century later, it still proved impossible to achieve consensus on rules or principles expressive of these understandings: see section C below.

14  State constitutions that have been the subject of recent revision may exhibit more detail (eg, Constitution Act 1902 (NSW), ss 35–50G) or provide somewhat more precise reflection of actual practice (eg, Constitution of Queensland 2001, s 42, recognizing the existence of the Cabinet); but the general point still holds good.

15  See generally Robert S Parker, ‘The Meaning of Responsible Government’ (1976) 11 Politics 178; George Winterton, Parliament, the Executive and the Governor-General: A Constitutional Analysis (Melbourne UP 1983) 71–85; and for examples of the many judicial references to these ideas, FAI Insurances v Winneke (1982) 151 CLR 342, 349 (Gibbs CJ), 364–65 (Mason J); Egan v Willis (1998) 195 CLR 424.

16  See also Andrew Inglis Clark, Studies in Australian Constitutional Law (2nd edn, Charles F Maxwell 1905) 64–65.

17  See further Chapter 4 ‘Independence’ in this volume.

18  As to the Commonwealth see Commonwealth Constitution, s 2, and Winterton, Parliament, the Executive and the Governor-General (n 15) 17–20; as to the States see Australia Act 1986, s 7. The Queen may, however, still exercise certain functions ordinarily exercisable by a Governor-General when she is present in Australia: see the Royal Powers Act 1953 (Cth), and the Australia Act 1986, s 7(4). The distancing of the Queen from Australian affairs is such that her United Kingdom subjects were in Sue v Hill (1999) 199 CLR 463 held to be ‘subjects of a foreign power’ and hence ineligible, under Constitution, s 44(i), for membership of the Australian Parliament.

19  See Chapter 26 ‘Separation of Legislative and Executive Power’.

20  For example John Quick and Robert Randolph Garran, The Annotated Constitution of the Australian Commonwealth (Angus & Robertson 1901) 699–700.

21  For expressions of this understanding in the course of the Convention Debates, see Crommelin (n 11) 127–48.

22  Section 63.

23  Official Report of the National Australasian Convention Debates (Adelaide, 19 April 1897) 910 (Edmund Barton).

24  ibid.

25  On the origins of the Executive Councils see A C V Melbourne, Early Constitutional Development in Australia (University of Queensland Press 1963) 105–11.

26  Australian Government, Department of Prime Minister and Cabinet, Federal Executive Council Handbook (2015) para 2.1.4.

27  On the mode of operation of the Commonwealth Executive Council, see Federal Executive Council Handbook (n 26).

28  Acts Interpretation Act 1901 (Cth), s 16A. See generally George Winterton, ‘The Constitutional Position of State Governors’ in H P Lee and George Winterton (eds), Australian Constitutional Perspectives (Law Book Company 1992) 274, 289; Grant Donaldson, ‘Aspects of State Executive Powers’ (2012-13) 36 University of Western Australia Law Review 145, 164–67.

29  See section D.1 below.

30  See the Federal Executive Council Handbook (n 26) para 1.2.3. Western Australia goes further: submissions are required to be countersigned by the Premier: Western Australia, Department of Premier and Cabinet, Executive Council Guidelines (2015) para 5.1.

31  Peter Bassett, ‘The Governor and the Constitution’ (1994) 53 Australian Journal of Public Administration 49, 52. The author was at the time of writing Official Secretary to the Governor of South Australia.

32  For a fuller treatment of these issues see Chapter 9 ‘Unwritten Rules’; and Republic Advisory Committee, An Australian Republic: The Options, vol 2, Appendix 6 (AGPS 1993).

33  Australian Constitutional Convention Official Record of Debates (Brisbane, 29 July-1 August 1985), Resolutions: Item B1 Structure of Government (Conventions of the Constitution); Constitutional Commission, Report of the Advisory Committee on Executive Government (1987) 39–42.

34  Bassett (n 31) 50; Anne Twomey, ‘The Unrecognised Reserve Powers’ (High Court Public Lecture, 14 November 2012) 5, <http://www.hcourt.gov.au/assets/publications/speeches/lecture-series/Twomey_lecture.pdf> accessed 31 December 2015 both citing Adegbenro v Akintola [1963] AC 40 (PC).

35  This was described, by the Australian Constitutional Convention of 1985 (n 33), as ‘the basic principle’ governing the conventions of the Australian Constitution.

36  The federal parliamentary Labor Party is commonly referred to as the Labor Caucus.

37  Kevin Rudd (twice: 3 December 2007–24 June 2010; 27 June–18 September 2013); Julia Gillard (24 June 2010–27 June 2013); Tony Abbott (18 September 2013–15 September 2015); Malcolm Turnbull (15 September 2015–).

38  Prime Minister Kevin Rudd, Press Conference 8 July 2013 <http://australianpolitics.com/2013/07/08/rudd-announces-historic-reform-to-alp-leadership-election-party-members-to-have-50-say.html> accessed 29 December 2015. The 75 per cent rule applies only when the Labor Party holds office; in opposition, it is reduced to 60 per cent.

39  ibid.

40  The 2013 procedure is recognized by the Party’s National Constitution as confirmed at the 47th National Conference (2015) cl 27 <http://www.alp.org.au/national_platform> accessed 2 January 2016, but the Constitution leaves it to Caucus to decide whether to operate it.

41  Candidates could go forward if nominated by as few as 15 per cent of the PLP membership. The current Australian Labor Party arrangements impose the more stringent requirement of nomination by 30 per cent of Caucus: (n 40).

42  Paul Finn, Law and Government in Colonial Australia (OUP 1987) 58–61, 95–102, 128–32.

43  See generally Paul Finn and Geoffrey Lindell, ‘The Accountability of Statutory Authorities’ Senate Standing Committee on Finance and Government Operations, Fifth Report, Statutory Authorities of the Commonwealth (1982) Appendix 1.

44  We discuss mechanisms of control below, see section C.6.

45  Australian National Airways Pty Ltd v Commonwealth (No 1) (1945) 71 CLR 29; Australian Coastal Shipping Commission v O’Reilly (1962) 107 CLR 46.

46  See Auditor-General Act 1997 (Cth).

47  Ombudsman Act 1976 (Cth).

48  Peter Cane, Administrative Tribunals and Adjudication (Hart Publishing 2009).

49  James Spigelman, ‘The Integrity Branch of Government’ (2004) 78 Australian Law Journal 724.

50  John Goldring, ‘Accountability of Commonwealth Statutory Authorities and “Responsible Government” ’ (1980) 11 Federal Law Review 353, 366–67.

51  See Part VI ‘Federalism’.

52  Thus from 1967 to 2011 Commonwealth legislation entrusted the day-to-day regulation of petroleum activities in Commonwealth waters to State Ministers and their departments: Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth), replacing Petroleum (Submerged Lands) Act 1967 (Cth).

53  Aston v Irvine (1955) 92 CLR 353. For discussion see Finn and Lindell (n 43) esp at 185–90; Graeme Hill, ‘Will the High Court “Wakim” Chapter II of the Constitution?’ (2003) 31 Federal Law Review 445, 473–76.

54  Quick and Garran (n 20) 711.

55  Leslie F Crisp, Australian National Government (5th edn, Longman Cheshire 1983) 384–85.

56  Re Patterson; ex parte Taylor (2001) 207 CLR 391, 403 [17] (Gleeson CJ), 415 [66], 457 [205], 460 [211] (Gummow and Hayne JJ), 498 [320] (Kirby J), 519 [380] (Callinan J).

57  Section 65 of the Constitution provides that the number of Ministers may be determined by legislation.

58  Members of Parliament (Staff) Act 1984 (Cth), s 14.

59  Yee-Fui Ng, Ministerial Advisers in Australia: The Modern Legal Context (Federation Press 2016) 44–52, 58–64.

60  Senate Select Committee, A Certain Maritime Incident (2002) Commonwealth of Australia xxxiv.

61  Ng (n 59) 134–67.

62  David Hamer, Can Responsible Government Survive in Australia? (rev edn, Department of the Senate, 2004) 140–47.

63  Diana Woodhouse, Ministers and Parliament: Accountability in Theory and Practice (Clarendon Press 1994) 38.

64  Prime Minister, A Guide on Key Elements of Ministerial Responsibility (1998) 13.

65  The current administration’s Statement of Ministerial Standards (2015) focuses exclusively on the personal conduct of Ministers.

66  Carltona Ltd v Commissioners of Works [1943] 2 All ER 560, 563; applied in Australia by O’Reilly v State Bank of Victoria Commissioner (1983) 153 CLR 1, 11–13 (Gibbs CJ), 30–33 (Wilson J).

67  For example Migration Act 1958 (Cth), s 496.

68  For example ibid, s 189.

69  Christopher Hood and Martin Lodge, The Politics of Public Service Bargains: Reward, Competency, Loyalty—and Blame (OUP 2006) 56.

70  Vince Fitzgerald, ‘Advice on Public Policy: The Changing Balance between the Public Service and Political Advisers’ in Julian Disney and John R Nethercote (eds), The House on Capital Hill: Parliament, Politics and Power in the National Capital (Federation Press 1996) 119.

71  See section C.6.

72  Terence Daintith and Alan Page, The Executive in the Constitution: Structure, Autonomy, and Internal Control (OUP 1999) 37–45.

73  Public Service Act 1999 (Cth), s 57(1).

74  Sections 13(2), 15. This duty is to be carried out ‘consistently with government policy’: s 21.

75  Section 19.

76  Australia, Parliament, House of Representatives, Public Finance, Governance and Accountability Bill 2013: Explanatory Memorandum, para 153.

77  Public Service Act 1999 (Cth), s 58.

78  Australian Public Service Commission, State of the Service Report 2014–15 (2015) 13.

79  Patrick Weller, Australias Mandarins: The Frank and the Fearless? (Allen & Unwin 2001) 22.

80  Public Service Reform Act 1984 (Cth), s 14; Public Service Act 1999 (Cth), ss 58, 59(1).

81  Public Service Act 1999 (Cth), s 59(1).

82  Weller (n 79) 33.

83  Emma Griffiths, ‘New PM Tony Abbott Sacks Three Public Service Bosses as First Act’, ABC News (online) (19 September 2013) <www.abc.net.au/news/2013-09-18/abbott-sacks-three-public-service-bosses-as-first-act/4965690> accessed 9 May 2016.

84  Daintith and Page (n 72) 62–63. See now the Constitutional Reform and Governance Act 2010 (UK).

85  Barratt v Howard (1999) 165 ALR 605, 609 [9]–[10].

86  Director-General of Education v Suttling (1987) 162 CLR 427, 437–38.

87  Lucy v Commonwealth (1923) 33 CLR 229.

88  Barratt v Howard (2000) 96 FCR 428, 444, 450–52.

89  An early source is the report of a taskforce of the 1976 Royal Commission on Australian Government Administration. Gerald E Caiden, Royal Commission on Australian Government Administration Task Force on Efficiency, Towards a More Efficient Government Administration, First Report (1975).

90  A list of entities of different types, organized by portfolio, can be found at Australian Government, Department of Finance, List of General Government Sector, Public Non-financial Corporation and Public Financial Corporation Entities under the Public Governance, Performance and Accountability Act 2013 (PGPA Act)—30 September 2015 <www.finance.gov.au/sites/default/files/list-ggs-pnfc-pfc-pgpa.pdf> accessed 28 January 2016.

91  Offshore Petroleum and Greenhouse Gas Storage Act 2006, ss 695AB–95R.

92  Above section C.2.

93  Finn (n 42).

94  Goldring (n 50) 357–60.

95  For example Australian Security Intelligence Organisation Act 1979 (Cth), s 8.

96  For example Home Care Service Act 1988 (NSW), s 4(4).

97  Darrell Barnett, ‘Statutory Corporations and “The Crown” ’ (2005) 28(1) University of New South Wales Law Journal 186, 194–99, 215–17.

98  For example Australian Crime Commission Act 2002 (Cth), s 18.

99  Under the Financial Management and Accountability Act 1997 (Cth) and the Commonwealth Authorities and Companies Act 1997 (Cth).

100  PGPA Act, ch 3.

101  Sections 97–99. For other entities see ss 41–44.

102  Sections 25–31.

103  Section 22. No such orders have yet been made. For the position of heads of non-corporate entities, including Departmental Secretaries, see section C.5 above.

104  For more detail see below section D.2.

105  For example Senate Finance and Public Administration Committee, Inquiry into the Administration of Health Practitioner Registration by the Australian Health Practitioner Regulation Agency (2011).

106  Catherine Donnelly, ‘The Response of English Public Law to Private Actors in Public Governance’ in Matthias Ruffert, The Public-Private Law Divide: Potential for Transformation? (British Institute of International and Comparative Law 2009) 169, 171.

107  Compare Italian Constitution (n 4), art 43, and Preamble to the French Constitution of 1946, para 9, in each case making provision for the reservation to the public sector of certain economic activities.

108  Donnelly (n 106).

109  For example Vietnam Veterans’ Affairs Association of Australia (NSW Branch Inc) v Cohen (1996) 70 FCR 419, 432.

110  See Plaintiff M61/2010E v Commonwealth (2010) 243 CLR 319, 345 [51].

111  NEAT Domestic Trading Pty Ltd v AWB Ltd (2003) 216 CLR 277, 296–99 (McHugh, Hayne and Callinan JJ).

112  The Datafin principle emphasizes the public nature of the power exercised, rather than whether its source was public or private, thus allowing judicial review over outsourced functions. R v Panel on Take-overs & Mergers; Ex parte Datafin plc [1987] 1 QB 815, 838 (Sir John Donaldson MR), 847–48 (Lloyd LJ), 852 (Nicholls LJ). There is no High Court majority directly applying the Datafin principle. See Emilios Kyrou, ‘Judicial Review of Decisions of Non-governmental Bodies Exercising Governmental Powers: Is Datafin Part of Australian Law?’ (2012) 86 Australian Law Journal 20.

113  Nicholas Seddon, Government Contracts: Federal, State and Local (3rd edn, Federation Press 2004) 33–36, 39–42.

114  (2005) 143 FCR 217, 218, 271–72.

115  Ombudsman Act 1976 (Cth), ss 3(4B), 3BA.

116  Auditor-General Act 1997 (Cth), ss 18B, 32–33.

117  Senate Procedural Order of Continuing Effect, Departmental and Agency Contracts (2001).

118  See, eg, The Auditor-General, ANAO Report No 4 2015–16 Performance Audit, Confidentiality in Government Contracts: Senate Order for Departmental and Entity Contracts (Calendar Year 2014 Compliance) Across Entities (2015).

119  Freedom of Information Act 1982 (Cth), s 6C.

120  ibid ss 47, 47G.

121  Department of the Prime Minister and Cabinet, Cabinet Handbook (8th edn, 2015) cl 5.

122  ibid.

123  ibid cl 4.

124  See text at section B.3 above.

125  The Queensland Constitution requires there to be a Cabinet consisting of the Premier and the Ministers of the State. It also provides that the Cabinet is collectively responsible to Parliament. Constitution of Queensland 2001 (Qld), s 42.

126  Minister for Arts Heritage and Environment v Peko-Wallsend (1987) 15 FCR 274, 276, 279 (Bowen CJ).

127  Department of the Prime Minister and Cabinet, Cabinet Handbook (8th edn, 2015) cls 76–84.

128  ibid.

129  Thomas Poguntke and Paul Webb, ‘The Presidentialisation of Politics in Democratic Societies: A Framework of Analysis’ in Poguntke and Webb (eds), The Presidentialisation of Politics: A Comparative Study of Modern Democracies (OUP 2005) 1–25.

130  See section C.1 above.

131  On coercion and money as the essential sources of governmental power, see Terence Daintith, ‘Regulation by Contract: The New Prerogative’ [1979] Current Legal Problems 41.

132  For further material on this complex area see generally Kathie Cooper, Warwick Funnell, and Janet Lee, Public Sector Accounting and Accountability in Australia (2nd edn, UNSW Press 2012); Charles Lawson, ‘Re-invigorating the Accountability and Transparency of the Australian Government’s Expenditure’ (2008) 32 Melbourne University Law Review 879; Marc Robinson, ‘Financial Control in Australian Government Budgeting’ (2002) 22 Public Budgeting and Finance 80. All of these sources pre-date the latest comprehensive legislation in the field, the PGPA Act 2013.

133  PGPA Act, ss 53, 107.

134  Northern Suburbs General Cemetery Reserve Trust (1993) 176 CLR 555, 599 (McHugh J).

135  The movement, in the seventeenth and eighteenth centuries, away from such grants and towards occasional and finally annual appropriations is traced in Josef Redlich, The Procedure of the House of Commons: A Study of its History and Present Form, vol 3 (Constable 1903) 159–70.

136  See further Chapter 24 ‘Parliaments’. The definition of ‘ordinary annual services of the Government’ (where the Senate’s powers in relation to appropriation bills are more limited) was settled in 1965 by a ‘Compact’ between the Houses: see for its content Australian Parliament, Bills Digests, Appropriation Bill (No 6) 2011–12.

137  Some such appropriations are effected by the Constitution itself: see ss 3 (salary of the Governor-General); 48 (allowances to members of the federal Parliament); and 66 (salaries of the Queen’s Ministers of State).

138  Quick and Garran (n 20) 670.

139  Senate Standing Committee for the Scrutiny of Bills, Accountability and Standing Appropriations, Fourteenth Report of 2005 (2005). The percentage has increased every decade since 1901: it was 10 per cent in 1910, 49 per cent in 1950, and 74 per cent in 1993. In 2012 the Department of Finance suggested that the figure was 75 per cent: Australian Government, Department of Finance and Deregulation, Is Less More? Towards Better Commonwealth Performance (Commonwealth Financial Review Discussion Paper 2012) 24. It appears from the same source that the United Kingdom and New Zealand get by with standing appropriations of no more than 29 per cent and 11 per cent of total spending.

140  See generally Richard Webb and David Richardson, The Commonwealth Budget: Process and Presentation (Information and Research Services Research Paper No 6, 2003) section 4.2.

141  See (n 136).

142  Parliament of Australia, Consideration of Estimates by the Senate’s Legislation Committees, Senate Brief No 5 (2014) <http://www.aph.gov.au/About_Parliament/Senate/Powers_practice_n_procedures/Senate_Briefs/Brief05> accessed 26 January 2016. Each Committee covers a group of ministerial portfolios, including both departments and related agencies.

143  On the thinking behind accrual output budgeting see generally Robinson (n 132).

144  Combet v Commonwealth (2005) 224 CLR 494 (Gummow, Hayne, Callinan and Heydon JJ).

145  Australian Government, Senate Standing Committee on Finance and Public Administration, Committee Report ‘Transparency and Accountability of Commonwealth Public Funding and Expenditure’ (2007), Commonwealth Government Response 9.

146  See for example Appropriation Act (No 1) 2015–16 (Cth), ss 3 and 7, and compare with the provisions of Appropriation Act (No 1) 2005–06 (Cth), discussed in Combet (n 144) [119]–[124]. The Department of Finance went so far as to suggest in 2012 that the Acts should be ‘simplified’ by omitting reference to outcomes altogether (Australian Government, Department of Finance and Deregulation (n 139) 22, 26), but this has not been followed up.

147  See generally Andrew Murray, Review of Operation Sunlight: Overhauling Budgetary Transparency (2008), and the Government Response (n 145). And see above, at section C.6, for the convergence in accounting and reporting obligations of corporate and non-corporate Commonwealth entities effected by the PGPA Act.

148  Murray (n 147) Recommendation 15.

149  See Australian Government, Department of Finance and Deregulation (n 139) 23.

150  See Part VI ‘Federalism’.

151  See OECD, The OECD Report on Regulatory Reform: Synthesis (OECD 1997); OECD, Regulatory Impact Analysis: Best Practices in OECD Countries (OECD 1997).

152  See generally Dennis C Pearce and Stephen Argument, Delegated Legislation in Australia (4th edn, Butterworths 2012) 59–92.

153  See further above section B.3.

154  ‘Better regulation’ arrangements may, however, be linked with established procedures for Parliamentary scrutiny, as under the Subordinate Legislation Act 1989 (NSW), s 5 and sch 2, requiring most proposals for statutory rules to be accompanied by a Regulatory Impact Statement.

155  The Australian Government Guide to Regulation <http://cuttingredtape.gov.au/handbook/australian-government-guide-regulation> accessed 9 May 2016.

156  For examples see ibid 56–58.

157  Regulatory impact statements are published on the website of the Office of Best Practice Regulation (<http://ris.dpmc.gov.au>), which will draw attention to any respects in which the RIS is non-compliant, but this does not prevent its presentation to Cabinet in support of the regulatory proposal. Earlier practice to the contrary was abandoned in the face of departmental pressure: The Australian Government Annual Deregulation Report 2014 <http://cuttingredtape.gov.au/sites/default/files/files/ausgov_annual_dereg_report_2014.pdf> accessed 9 May 2016.

158  An example would be the value to be placed on the preservation of bio-diversity.

159  At the OBPR website <http://ris.dpmc.gov.au> accessed 9 May 2016.

160  As the High Court acknowledged in one of its rare ventures into the area: Re Patterson (n 56) [14]–[15] (Gleeson CJ), [210]–[211] (Gummow and Hayne JJ).

161  Patrick Weller, Cabinet Government in Australia, 1901–2006: Practice, Principles, Performance (UNSW Press 2007) 192.

162  Financial Framework Legislation Amendment Act (No 3) 2012. Williams v Commonwealth (No 2) (n 1) demonstrated that the attempt had been less than totally successful. See further Chapter 26 ‘Separation of Legislative and Executive Power’.

163  Sir Samuel Griffiths, Notes on Australian Federalism: Its Nature and Probable Effects (Queensland Government Printer 1896) 17 <http://adc.library.usyd.edu.au/data-2/fed0017.pdf> accessed 9 May 2016.

164  For a general discussion of ‘multiple accountabilities’ see Colin Scott, ‘Accountability in the Regulatory State’ (2000) 27 Journal of Law and Society 38.