Loss of Supply

Loss of Supply occurs where a government in a parliamentary democracy is by parliamentary vote denied a supply of treasury or exchequer funds, by whichever house or houses of parliament is constitutionally entitled to grant and deny supply. A defeat on a budgetary vote is one such way by which supply can be denied.

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When a Loss of Supply occurs, a prime minister is generally required either by constitutional convention or by explicit constitutional instruction to:

Related Topics:
Prime minister - Constitutional convention - Constitution

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• immediately resign (allowing the majority blocking Supply to form a government), or
• seek a parliamentary dissolution (so allowing the electorate to pass judgment on the issue).

Some constitutions however do not allow the option of dissolution, instead requiring a resignation.

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A similar deadlock can occur within presidential systems where it is known as a budget crisis. In contrast to parliamentary systems, the failure of the legislature to authorize spending does not result in new elections because legislatures in such systems operate to fixed terms and so cannot be dissolved ahead of schedule, which can result in a prolonged crisis.

Related Topics:
Presidential system - Budget crisis

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