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Common(wealth) Knowledge #44: Labor won't form majority - so what is a confidence-and-supply deal?

Updated: Apr 3, 2023

1 week on from the NSW state election.

By 9pm on March 25th, just two hours after polls had closed on election night, many news outlets had announced that Labor would be forming government in New South Wales. By the end of the night, it was expected that Labor would form a majority government, with 47 seats in the NSW Legislative Assembly, the magical number needed for a majority government. However, one week after election night, it is clear that Labor won’t have enough seats for a majority. So, where to from here?


At the time of writing, Labor holds 45 seats out of 93 in the Legislative Assembly. With only the electoral district of Ryde to call, and the Liberals leading there, Labor cannot reach 47 seats. This leaves them with two options to form government: either form a coalition government with the Greens, who hold 3 seats, or work with at least 2 of the 9 independent MPs. Chris Minns essentially ruled out the first option before election night, and three independents have confirmed that they will back the Labor minority government, thus getting Labor across the finish line, by making a confidence-and-supply agreement.


A confidence-and-supply agreement is based on the notion of ‘supply,’ which developed in England during the Middle Ages. English kings used to be absolute monarchs. This meant that they held all the powers of government, including the power of taxation. However, this changed with the Magna Carta, which was the foundation of much of the Australian Constitution.


At the end of the 12th century, King Richard the Lionheart helped lead the 3rd Crusade in Palestine, which cost the government a lot of money. Under his successor, King John, a major villain in the stories of Robin Hood, the remaining money was used up. A revolt by the nobles ended with King John being forced to sign the Magna Carta in 1215, promising not to raise taxes without the consent of the nobles. However, it wouldn’t be completely accepted until 1297 under King Edward I, known as King Edward Longshanks in Mel Gibson’s Braveheart.


As the centuries went on, Parliament developed, and one of its few powers was the power of taxation. The monarch could not tax the people without Parliament approving it. Clashes between Parliament and the Stuart monarchs in the 17th century led to the Bill of Rights 1689, which reaffirmed this power.


In the following century, the Parliament would undergo massive changes, in part due to the political parties that began forming at the end of the 17th century. The executive, led by the monarch, had the power to spend money. But they couldn’t spend money without it being raised under Parliament’s taxation power. In other words, Parliament had to supply the monarch with money. For this power to be exercised, a majority of the House of Commons, the UK’s lower house, would have to create and pass laws to tax and appropriate money. This was the house of the people, the commoners. The nobles in the House of Lords couldn’t change these bills, only accept or reject them, a power that they no longer have.


The monarch agreed that whoever could control the House of Commons, and therefore ensure that supply bills would pass Parliament, would have the metaphorical keys to the treasury. In other words, the monarch had confidence in their ability to ensure supply would not be interrupted, as without money the government couldn’t function. In fact, the Prime Minister wasn’t originally known as the Prime Minister; that title was officially adopted later, although it was an unofficial title used at the time. Originally, the Prime Minister was known officially known as the First Lord of the Treasury, a title that still exists today.


A majority government is pretty straightforward. The Crown, embodied in the monarch or their representative, which in NSW’s case is the Governor, will make the leader of the party that controls the majority of seats the head of government, the Premier in this scenario. The Governor has confidence that the Premier is can control their party sufficiently to ensure that supply bills can pass Parliament. Members of Parliament who don’t believe that the Premier has the confidence of enough members of their own party to ensure that supply bills pass can challenge the Premier through a vote of no confidence.


A confidence-and-supply agreement seeks to reach the same outcome. If no party has the majority of seats in Parliament, a party can make deals with members of the crossbench, including both independents and minor party MPs, to form government. Those crossbenchers agree to vote for supply bills put forward by the government, and put their confidence in the ability of that party’s leader to ensure that these bills pass. In return, the party that can now form government will agree to vote for certain laws and amendments put forward by the crossbenchers that they are working with.


Despite being the result of a system that is over 800 years old, and is largely symbolic in the post-Whitlam Dismissal Australian political scene, where the major parties agree that they won’t abuse their numbers in the upper house to prevent supply bills from passing, it still remains essential in the political system. One needs only to look to the United States, and how often the government cannot spend money and shuts down when opposing parties control different houses, to see the merits of the Westminster system that is used by Australia to this day.


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Sources:

Bill of Rights 1689, 1 Wm & M sess 2, c 2.

Magna Carta 1297, 25 Edw 1, c 1.


Elijah Granet’s ‘Better AustLII’ web extension.

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