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This chapter explains the further development throughout the twentieth century of public finance law and its impact on the distribution of financial authority between parliaments, executives and judiciaries. It accounts for the delegation of ever-greater financial authority to executive governments as a result of a number of major events: the world wars, the growth of the welfare state, the development of central banking and the influence of private-sector managerial philosophies on public administration. Taking a broad sample of Australia, Canadian, New Zealand and UK legislation and judicial doctrine, the chapter describes how and why sovereign borrowing was severed from parliamentary processes, the preponderance of public expenditure came to be authorised by standing (rather than annual) appropriation legislation, central banks acquired independent authority to provide monetary finance to treasuries and how public auditing functions became more concerned with the efficient (rather than lawful) use of public money. The manner in which judiciaries' jettisoned their private-property protecting attitude to taxation legislation is also explained.
This chapter provides an historical analysis of the UK judiciary's limited role in central government public finance throughout the eighteenth and nineteenth centuries. Tax litigation represented the high point of judicial involvement in public finance, but judges' hostility to fiscal legislation did little to bolster Parliament's revenue-raising interests. Mid-nineteenth century explorations with judicial review of appropriation legislation never became a settled practice and the judiciary imposed no discernible constraints on the legal limits of public borrowing (by the Treasury) or lending (by the Bank of England). By the conclusion of the nineteenth century, it was clear that the common law judiciary would not have a prominent role in the model of parliamentary public finance which was exported throughout the common law world. Various celebrated and important cases are critiqued, including: Auckland Harbour Board v The King; Bowles v Bank of England; the Bankers' Case; and The Queen v The Lords Commissioners of the Treasury.
This chapter describes the export of the model of parliamentary public finance developed in the UK to the colonies, dominions and independent states which emerged from the British Empire. It opens by surveying the critical similarities and differences between public finance in the British and US constitutional traditions, before moving to explain how finance was treated in Canadian and Australasian colonial constitutions. Thereafter, the chapter explains how finance provisions became a form of 'constitutional boilerplate', adopted by independent dominions and republics in the twentieth century. By the conclusion of that constitutional itinerary, it is observed that the distribution of financial authority between Parliament and the executive government in nineteenth century Britain became the norm prevailing in the parliamentary constitutional world. Close attention is paid to the drafting history and provisions of constitutional documents from a number of parliamentary jurisdictions (including Australia, Canada, Indian, Malaysia, Nepal and Nigeria), as well as judicial decisions on public finance throughout the Commonwealth of Nations.
This chapter evaluates the limited function of common law judiciaries in public finance by reference to UK and Australian case studies. It opens by observing and explaining the asymmetrical involvement of judiciaries in public finance law: why disputes concerning tax legislation are more justiciable than disputes concerning appropriation, debt and monetary finance. The chapter then analyses the only modern attempt by a common law judiciary to expand its involvement in disputes concerning public expenditure, Williams v The Commonwealth of Australia, and its aftermath. That Australian case study neatly illustrates the judiciary's inability to effect a meaningful re-distribution of financial authority away from treasury departments and towards parliaments. The chapter then examines the problems with understanding common law courts as systemically reliable mechanisms to enforce parliamentary authority over taxation by reference to the UK judiciary's tax law and tax agency practice. The chapter concludes that the presence of judicial power does not substantially impact the distribution of financial authority between executive governments and parliaments.
This final chapter raises a number of normative research questions for future discussion. How much financial power should be concentrated in representative assemblies? Does law govern the state if not enforced by the judiciary? Should an analytical wall be constructed between 'public' and 'private' finance in constitutional thinking? The promises and limitations of applying some analytical political theories to the design of constitutional institutions are observed, and importance of engaging with data concerning the deliberative capacities and resource constraints incumbent on politicians and public sector employees is emphasised. The conflict between Diceyan models of parliamentary control and modern welfare states is broached, as are the book's points of engagement with the work US constitutional theorists, particularly Scheuerman, Posner and Vermeule. Finally, the position of private financial markets vis-ˆ-vis the state is identified as an important topic in future examinations of finance and constitutionalism.
This chapter introduces the central questions broached in the book. How does law distribute authority over public finance between constitutional institutions? How did that law develop? What role do economic, financial and administrative conditions have on the distribution of financial authority between parliaments and executive governments? Do judiciaries play a meaningful role in supervising public finance? Does it make sense to understand parliaments to 'control' public finance in the parliamentary tradition of government? The chapter opens by explaining AV Dicey's understanding of parliamentary control of public finance and his influence on later academic and practical engagements with the financial aspect of constitutionalism. Critical financial concepts are then explained, particularly the different functions performed by fiscal activities (taxing and spending), debt finance and monetary finance. The dominant position of 'central' government finance to the modern constitutional state is introduced and the distinction between 'parliamentary' and 'congressional' constitutional systems is clarified. The chapter closes by summarising the book's major claims.
This chapter commences a case study analysis into the influence of economic and financial conditions on the operation of public finance law and the constitutional distribution of authority between parliaments and executive governments. The fiscal activities (taxing and spending) of the central governments of the UK and the Commonwealth of Australian between 2005 and 2016 are selected for analysis. The chapter begins with a detailed examination of appropriation and taxation legislation in the two jurisdictions, including the respective financing contribution of annual and standing statutes and their role in delegating authority to treasury departments. The chapter then examines the influence of expansions and contractions in economic output on the balance of constitutional authority possessed by parliaments, with a special focus on the impact of the financial crisis. Thereafter, the often-hidden reality of public spending in breach of appropriation legislation is studied, along with the legal frameworks governing public accounts and audit. The chapter concludes by observing the vast amount of fiscal authority delegated to treasury departments by public finance law.
This chapter provides a case study analysis of the operation of public finance law concerning sovereign debt and monetary finance in the UK and Australia between 2005 and 2016. The legal and financial mechanics of sovereign borrowing and monetary finance are closely examined by reference to the authority of central banks and treasuries to finance the state beyond the point of fiscal deficit. The very broad powers delegated to treasuries over sovereign debt are scrutinised in the context of vastly different economic conditions, and their capacity to shrink the financial authority held by parliaments is observed. Special attention is then given to the monetary financing powers of central banks, particularly the Bank of England. The emergency monetary finance provided by the Bank of England during the financial crisis is surveyed, and the public financing aspect of 'unconventional' monetary policy, particularly quantitative easing, is examined. The chapter closes by observing the absence of meaningful legislative governance of debt and monetary finance in the context of financial or economic emergencies.
This chapter explains how a distinct constitutional model of public finance developed in the UK between 1700 and 1900, focusing on the legal and institutional relationship between Parliament and the Treasury. After providing critical economic context regarding the financial activities of British governments, the chapter explains how the complex inter-play of taxation and appropriation legislation distributed financial authority between parliament and executive government. It then moves to survey the growth of statutory public borrowing, the law underpinning the Bank of England's public financing functions, the appointment of the Treasury at the financial apex of Westminster government and the growth of a settled system of public audit. Special attention is paid to a number of topics: appropriation legislation (annual and standing); time-limited taxation statutes; the Treasury's power to adjust parliament's approved expenditure (virement); the connection between annual appropriation legislation and the UK's 'National Debt'; the Bank of England's powers to finance government; and the complicated relationship between Treasury and Comptroller and Auditor-General.