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 deny supply. A defeat on a budgetary vote is one such way by which Supply can be denied.
Where a Loss of Supply occurs, a prime minister is required immediately either to
- resign (so, allowing someone else to attempt to gain Supply), or
- seek a parliamentary dissolution (so allowing the electorate to pass judgment on the issue).
- The defeat of Garret FitzGerald's government in a budget vote in Dáil Éireann in the the Republic of Ireland in 1982. FitzGerald immediately sought, and was granted, a Dáil dissolution.
- In the Australian Constitutional Crisis of 1975, the Australian Senate refused to vote on a bill which authorized supply for the government of Gough Whitlam. He was subsequently dismissed by the Governor-General of Australia, having failed either to resign or request a dissolution. This dismissal was extremely controversial in that Whitlam argued that the upper house acted against convention in refusal to pass a bill which the lower house had passed and again in refusing to put the bill to a vote, where it would have likely passed.