Paul's Blog: Could the US political crisis over debt limits happen in Australia?

Could the US political crisis over debt limits happen in Australia?

Watching the protracted and painful negotiations in Washington DC over the last few weeks, concerning attempts to lift the US debt ceiling, prompts me to ask: could we face a similar process in the Australian Parliament?  And if not, is that a good thing or a bad thing?

The short answer to the first question is no. Our system very rarely generates the same messy, uncertain and protracted process of public negotiation between different elements of the legislative system.  There are three main reasons why.

First, the US system has more competing centres of power than ours.  A bill needs to pass not just both Houses of Congress, but the President.  He has a formal right of veto, which means that legislators in the two houses must always keep an eye on what is going to be acceptable or unacceptable to the President.  By contrast, the person at the top of our system, the Prime Minister, is part of one of the houses and indeed holds office as a consequence of heading the majority party in the lower house.  In effect, two roles in the US system (Speaker of the House and President) are combined into one role in the Australian system.

Secondly, in the US system the legislative and executive branches are separate. That is, in the US the President heads up the executive branch which spends the budget and borrows money – but only after the legislative branch (the Congress) agrees the budget and borrowing limits.  The present crisis is caused by the fact that the President wants to borrow more money, but large sections of Congress do not want to allow him to do so – unless he agrees to sharp spending reductions.  A related complexity is that legislation is introduced in Congress by individual Congressmen or Senators – it is not up to the President to introduce legislation. 

By contrast, in the Australian system the executive branch which spends the money is headed by the same person who leads the party which controls the lower house. So the dispute occurring in America is much less likely to occur under our system; and as a matter of process, most bills being introduced into our Parliament are effectively written by the executive branch.  That is, a bill about spending or borrowing will essentially be written by the Treasury – which simplifies a lot of the legislative process because it is less likely that legislation will need to be corrected for technical errors.

A third key difference between the US and the Australian systems is that in our system party discipline is much stronger.  If the leader of a party announces a policy and a Bill to give effect to the policy, it is very rare that changes will subsequently need to be made because other members of that party will not support the policy. Yet this is what happened at the end of last week, when Republican Speaker of the House John Boehner made a deal on the spending limit Bill with President Obama, but was unable to persuade his colleagues to support the Bill without introducing a major new element (a provision requiring a balanced budget) that had not been part of his deal with Obama.

So is it a good thing or a bad thing that our system is so different to the US?  I recently discussed this with an American who is familiar with both the US and Australian political systems. He observed that in Australia everything gets sorted out behind closed doors. It is very hard for affected citizens or organisations to know what is happening and to speak up for their own interests.  By contrast in the US, the process is much more transparent – which is better for democracy.

That argument has weight; but on balance I prefer our system.  The institutions of government in the US were deliberately designed to make it hard for a government to tyrannise its citizens. The very rigid separation of powers makes it hard to act quickly unless there is very wide agreement about what is proposed. 

In the Australian system, both the formal mechanisms (a less rigid form of separation of powers) and the informal mechanisms (stronger party discipline) tend to make it easier for governments to get things done.  Even in the present unusual circumstances of a minority government, the Gillard government is getting the majority of its legislation through the Parliament.  Certainly, our system has some important checks and balances – particularly the fact that it is unusual for the party which controls the House of Representatives to also control the Senate.  (In this it is an interesting contrast to New Zealand, which has only one house in its Parliament.) And of course the ultimate sanction is that a government which acts – but which displeases the people – will lose office at the next election.

In a fast moving and complex world, you would rather not have a system which can reduce a government to a state of near chaos in times of crisis. Unfortunately, that is the downside of the US system.  The Australian system, while far from perfect – what human system ever is? – seems to have some significant practical advantages compared to the US.