A loss of supply affects the government.
Loss of supply occurs where a government in a parliamentary democracy using the Westminster System or a system derived from it is denied a supply of treasury or exchequer funds , by whichever house or houses of parliament or head of state is constitutionally entitled to grant and deny supply . For instance , in Australia , supply bills are defined as `` bills which are required by the Government to carry on its day-to-day business '' . When a loss of supply occurs , a prime minister is generally required either by constitutional convention or by explicit constitutional instruction to either resign immediately or seek a parliamentary dissolution . Some constitutions , however , do not allow the option of parliamentary dissolution but rather require the government to be dissolved or to resign . A deadlock between a head of state and the legislative body can give rise and cause for a head of state to prematurely dismiss the elected government , requiring it to seek re-election .