Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Hansard source

This Parliamentary Budget Office Bill 2011 will establish the Parliamentary Budget Office. The need to establish the Parliamentary Budget Office has been unanimously agreed by all members of parliament. The coalition went to the 2010 federal election with a policy to establish the PBO. The establishment of the PBO was a key element in the agreements that the Gillard government formed with the member for Lyne, the member for New England, the member for Denison and the Greens. The government committed to establishing the PBO as part of the Agreement for a Better Parliament: Parliamentary Reform, which was the agreement negotiated between the coalition, the Labor Party and Independents at the commencement of the 43rd Parliament of Australia.

Funding for a PBO has already been provided, with the 2011-12 budget allocating funding over four years. Despite the agreement that the PBO is needed and the allocation of funding commencing on 1 July this year, the government has not yet introduced the enabling legislation, so this coalition bill expedites the process of establishing the PBO. The Parliamentary Budget Office Bill 2011 will establish the PBO with the following features. It will be a new body accountable to the parliament rather than the executive, much like the Auditor-General or the Commonwealth Ombudsman. It will be independent to enhance the transparency and accountability of the budget process and help deliver better policy and financial outcomes for Australian taxpayers. It will be well resourced to ensure that it is effective. It will be headed by the Parliamentary Budget Officer, who will be appointed by the Presiding Officers of the Parliament on the advice of a committee of senior government officials. He or she will oversee an office of highly trained staff whose calibre will reflect the office's status as an independent body. It will be tasked with providing objective and impartial advice and analysis across the parliament on the Commonwealth budget and budget cycle, including the impact of major policy announcements. It will provide a confidential costing service for policies for all MPs and senators, both during and outside election periods.

The PBO established under this bill will differ in a number of ways from the recommendations of the Joint Select Committee on the Parliamentary Budget Office. The PBO will provide a service to confidentially cost policies submitted by members and senators all year round. This overlaps with and goes beyond the costing service provided under the Charter of Budget Honesty Act 1998, which provides for the public costing of policies only for the government and the opposition, not for the Independents or minor parties, and only during elections.

The joint select committee envisaged the services to cost policies provided by the PBO and under the Charter of Budget Honesty would run in parallel. This is unnecessary and wasteful duplication. The costing service provided to the opposition under the charter would effectively become redundant. A separate amendment to the Charter of Budget Honesty will delete the right of the opposition to submit policies for costing under the charter.

A further issue is the process by which the PBO will obtain information from government departments and agencies. The report of the joint select committee envisaged that there would need to be memoranda of understanding negotiated between the PBO and the Department of the Treasury and the department of finance. This bill removes the need for those MOUs by providing the PBO with distinct powers to obtain information from government departments and agencies. These powers are based on those of the Auditor-General, although the powers do not include search powers or the power to require information to be provided by other than public service agencies.

This bill also removes the need for the PBO to use the freedom of information processes, as the PBO has the power it needs to request and receive information from government departments and agencies as required. In saying this, there are restrictions on the power of the PBO to gather and publish information. The PBO will not be able to request and publish information that is cabinet-in-confidence. Also information cannot be published that would be contrary to the public interest.

With great power comes great responsibility. The substantial powers of the PBO to obtain information will be balanced with substantial provisions to prevent the inappropriate disclosure of information. Costings of policies submitted by MPs and senators and material gathered to perform these costings are to remain confidential unless express approval for public release is provided by the relevant MPs and senators. Breaches of the confidentiality provisions by staff of the PBO will carry heavy penalties.

The confidentiality provisions are an important feature of the PBO. They enable MPs and senators to enter into a private discourse with the PBO about the costs of policies. The costs of policies can then be released by the MPs and senators at their discretion and only after they are satisfied with the veracity of the costing. This prevents a situation which can arise under the existing costing parameters of the Charter of Budget Honesty, where costings of election policies are immediately made public by the departments of Treasury and finance without the opposition having the right of discourse or challenge.

The PBO will be adequately funded. The joint select committee recommended annual funding of no less than $6 million. The 2011-12 budget provided $24.9 million over the forward estimates. In an era of tight budgets and fiscal rectitude it seems inappropriate to guarantee any government department or agency a minimum fixed funding entitlement. This bill links the funding for the PBO to that provided for the Department of the Treasury, with funding set at a minimum of 3.5 per cent of the departmental appropriation for Treasury. That means that the PBO would benefit from greater funding should the functions of the Treasury be expanded but would also have to tighten its belt in times of fiscal restraint. That is appropriate.

In drafting this bill the coalition has also taken the time to consider the commitment provided under the parliamentary agreement that the PBO be located within Parliament House. However, under this bill the PBO will be an independent authority, so it will not be mandatory that the PBO be located in the Parliamentary Library.

The commitment to establish a strong, independent and well-resourced PBO has been a longstanding policy of the coalition. It is a key element of the agreement which underpins the new parliament. It is a commitment shared by the government, the opposition, the Independents and the Greens. The establishment of the PBO will improve scrutiny of the budget process and enhance the veracity of policies put forward by all MPs and senators. It is an important reform that builds on the Charter of Budget Honesty introduced by the former member for Higgins, Peter Costello. It ensures accountability and transparency in the management of our country's finances. On this basis, it is disappointing the government has not yet introduced the legislation. This bill will expedite the fulfilment of this important initiative, and I commend it to the House.

Bill read a first time.

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