From Proposal to Law

Written and accurate as at: 9 May 2013

Often we will hear in the media changes announced by the Government to Australia’s superannuation, taxation and social security policy. It’s interesting to know that just because the changes have been announced doesn’t guarantee they will be legislated.

In Australia, all changes to law must be legislated through the Federal Parliamentary Process which requires consent by the House of Representatives and the Senate and will often result in debate or changes by the Opposition.

This article takes a brief look into what is actually involved in the Federal Parliamentary Process and the steps that need to be taken to make a proposal into law.

Once ready, a member of parliament (in the case of financial matters, typically the Treasurer or Minister for Financial Services and Superannuation) introduces a Bill to Parliament through a First Reading. This is a little misleading in the sense the whole bill is not read, but rather allows for the presentation of the Bill, along with Explanatory Memoranda to all other members, and the public. Typically the member introducing the Bill will give a short (by Parliamentary standards) speech as to the purpose and intent of the Bill at this time.

The next step is the Second Reading. This is the first chance for the Opposition to state their position, and for debate to occur on the principal of the Bill. After this is, each clause of the proposed Bill is considered in detail. If agreed to by all members, clauses of a Bill can be grouped and consented to together, or the whole Bill agreed without the need for a clause by clause review.

A third and final reading in House of Representatives is generally a formality, and allows the Bill to be passed to the Senate where the same three readings take place. If the Senate changes the Bill during its consideration, it must then be referred back to the House of Representatives where the process starts over again. 

Once the Bill is passed through both houses, it is off to the Governor General to assent, which is where our laws must be agreed to by the Queen. As soon as assent is granted, the Bill becomes Legislation and is binding. 

With such a lengthy process and so much room for debate, it can often result in a long time between announcements being made law, and when made, they can look quite different from the intial proposal.

Interestingly, in some cases the Government can apply law with retrospective effect (meaning they may be backdated to have a start date before the law was passed), so it is important to keep an eye on proposals as they are presented.