Kelly O'Dwyer (Higgins, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Parliamentary Budget Office Bill 2011, a bill that has been brought forward by the shadow Treasurer, whose objects are very clear. The objects of this bill are to establish an independent statutory office of the Parliamentary Budget Officer to provide objective and impartial advice and analysis on the Commonwealth budget and budget cycle, medium- and long-term budget projections, the costs of policy proposals and other matters as requested by members and senators.

This is something that we on this side of the chamber understand is very critical to an open and transparent analysis of the budget. The coalition felt it so important that, before the last election, we brought forward this proposal as an election commitment. In government, it is something that we would implement directly. The government agree—belatedly—that there is a need for a parliamentary budget office, and they agree that it is world's best practice to have a parliamentary budget office, an independent body that can provide impartial advice on and analysis of the Commonwealth budget and major policy announcements and costings. However, we disagree as to the best way to implement the Parliamentary Budget Office.

I was a member of the Joint Select Committee on the Parliamentary Budget Office, which delivered 28 unanimous recommendations for the parliamentary budget office. We all agreed on the importance of and need for a parliamentary budget office. Indeed, this was something that the Independent members also agreed was critical to the functioning of the government, with the member for Lyne, the member for New England and the member for Denison, as well as the Greens, all making it a condition of their agreement to form government with the government just after the last federal election. The shadow Treasurer brought forward this bill on 22 August. He brought forward this bill because the government, which proclaimed that this was an important reform, had done absolutely nothing about it. Today, though, the government has brought forward its own bill for debate on the second reading. Its bill in comparison to the shadow Treasurer's bill is deficient in a number of ways. I would like to use the time available to me to outline to the chamber the key differences between the shadow Treasurer's bill and the government's bill.

First and foremost, we believe it is important for the Parliamentary Budget Office to be effective, and to achieve that it needs to be independent. There is only one way we can ensure its independence and that is to make sure it has the full powers granted to it to obtain information as and when it requires. By contrast, the government has taken a different position. The government's position under its bill is not only to establish the PBO with limitations but also to ensure that, if the PBO requires information, it needs to request that information by arrangement in writing from the Department of the Treasury, and Finance. It is also prevented under the government's bill from preparing economic forecasts and budget estimates. This goes to the very heart of the functioning of the Parliamentary Budget Office. To not allow the Parliamentary Budget Office to do its job, to gain the information that it requires and to prepare economic forecasts, means that it would be a very anaemic parliamentary budget office indeed. It would be a parliamentary budget office in name only.

The contrast between the government's bill and our bill is stark under the powers granted to obtain information. This is the second fundamental difference between the two bills. The government's bill requires the PBO to make arrangements, in writing, as I have said, with Commonwealth bodies to obtain information and documents relevant to the Parliamentary Budget Office's functions. It needs to agree to various memorandums of understanding, which, we know, would put limitations upon the information that could be obtained by the Parliamentary Budget Office. We will not constrain the Parliamentary Budget Office under our bill as brought forward by the shadow Treasurer. We understand that to do so would mean that they could not properly go about their business, role and function. So we will give them considerable information-gathering powers, and an additional element, the element of secrecy, so that any discussions that take place between it and a senator or a member take place in confidence so, again, the Parliamentary Budget Office can provide full and frank and fearless advice.

The third element that I wish to highlight tonight is that of the government's bill restricting the functions which can be performed by the PBO. This is of course at odds with what was provided for in the explanatory memorandum bought forward by the minister, who said in the explanatory memorandum when they were establishing the mandate for the PBO that the mandate of the PBO is to inform the parliament by providing:

… independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals …

However, to restrict the Parliamentary Budget Office from providing and preparing economic forecasts and budget estimates, whether as a whole-of-government agency or at program level, means that they are restricted in the functions that they can perform. This of course goes to the ability of the PBO to, as I said, do its job: provide frank and fearless advice, and perform all those roles and functions that we would expect of a parliamentary budget office—particularly one that this government lauds as being modelled on the Congressional Budget Office in the United States. This, with the restrictions brought forward by the government's bill, as opposed to our bill, would mean that it could not do those things.

Finally, I wish to also point out the difference between the government's bill and the bill that is brought forward by the shadow Treasurer, and that is the confidentiality of policy costings performed during and after an election period. It is important that, if we are to develop policy and develop policy well, the costings be done in a way that is confidential so that, when an announcement might be made, at the appropriate time, those policy costings can be released. This sometimes will take a variety of iterations. The Parliamentary Budget Office should be fully able to engage with the senator or member who has brought forward the request for policy costings. To pre-emptively make public those policy costings before a final decision is made by the senator or member or their party would mean that policy would not necessarily be brought forward or into the public domain at a time where it is final and complete, which would have adverse consequences for proper policy making in this place.

These are the fundamental differences between our bill and the government's bill. It is important to get the detail right, which is why we have brought forward amendments and why we say that the government should scrap its bill and instead implement the coalition's bill. We have seen before, when the government has got the detail wrong, just how dramatic those consequences can be. You only need to look at the pink batts saga to see how wrong and how devastating the impact can be not only from an economic perspective, with billions of dollars blown out in the budget, but also from a personal perspective, where we have seen people lose businesses and, most tragically, lives.

It is critical that the government get the detail right on this bill, which is why we encourage and commend them to resolve to implement the bill that has been brought forward today by the shadow Treasurer, the Parliamentary Budget Office Bill 2011. We commend that bill to the chamber and we ask the Independent members and the government members to join with us in implementing that bill.

Wyatt Roy (Longman, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in support of the shadow Treasurer's motion relating to the establishment of a parliamentary budget office, the Parliamentary Budget Office Bill 2011. The people in my community are fair minded people. When they make a decision about which policies are best for them and their families, they want to know that they are making those decisions based on the best possible information and advice. That is why the coalition has a history of supporting open, transparent and independent advice on the budget, the government's fiscal position and any financial implications of policy proposals. In fact, the coalition's policy for the establishment of a parliamentary budget office, together with the Charter of Budget Honesty Amendment Bill 2011, would establish an independent parliamentary budget office for the first time in Australia's history.

In 2009, the opposition called for an Australian parliamentary budget office modelled on the US Congressional Budget Office. The US CBO does not provide policy recommendations but it does independently analyse the revenue and spending implications of policy proposals. It also provides an analysis of the President's budget. In 2010, the Leader of the Opposition, Tony Abbott, called for the creation of a PBO, and a private member's bill was introduced into the Senate by Senator Barnett in June 2010. The Senate referred the establishment of the office to the Senate Finance and Public Administration Legislation Committee for inquiry. But the heart of the Labor government has never been in the establishment of a Parliamentary Budget Office. It was only at the insistence of the Independents and the Greens, whose support this Labor government needed in order to form government, that the government committed to the idea—the coalition's idea. It ended up being a promise the Labor party made to the Independents and the Greens as part of their much talked about agreement for a better parliament. The agreement provided that:

A Parliamentary Budget Office be established, based in the Parliamentary Library, to provide independent costings, fiscal analysis and research to all members of parliament, especially non-government members.

So why has the government been dragging its feet on this? What does it have to hide? Could it be that the Labor government's much promised surplus is looking shaky?

An opposition member: Yes.

Could be. This Labor government has finally been shamed into delivering on its commitment, at the coalition's insistence on action in this area. As the previous speaker, the member for Higgins, established, when the government has acted it has acted to establish a Parliamentary Budget Office in name only. The Joint Select Committee on the PBO tabled its recommendations on 23 May 2011—months ago. The 2011-12 budget provides funding of $24.9 million over four years, an appropriation welcomed by the coalition.

Again I ask: why did the government drag its heels on a reform designed to ensure the integrity and the sustainability of Commonwealth fiscal policy? The establishment of a Parliamentary Budget Office has been an important part of coalition policy for some time and is a key election commitment. Following the coalition's lead the Treasurer flagged in his economic note of 24 August 2011 that it was finally going to move on its promise to deliver the Parliamentary Budget Office. But now we are faced with a proposal that is inferior in many ways to the coalition's proposal. Instead of being a mechanism where the governance processes are improved, such as the case with the US Congressional Budget Office, it is yet another mechanism where Labor can perpetuate its political spin.

The coalition, unlike the government, would establish a new body accountable to the parliament not beholden to government departments. The Labor government, for example, does not offer a confidential costing service for all members and senators who are not members of the government during the election caretaker period, something the coalition would do. This is an essential component in ensuring that members of parliament and senators can have private discussions with the PBO about the financial implications of policy proposals, and this is a non-negotiable aspect of the coalition's bill. We fear that this Labor government is playing politics with the Independents on the Parliamentary Budget Office. The coalition provides an independent statutory body that has strong powers to request information in order to provide comprehensive advice. We look forward to the support of the Independents and the Greens for an office that will be able to provide truly independent advice and policy analysis.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

It is terrific to see you again in the chair, Mr Deputy Speaker Adams, and I hope you are well. I rise tonight to speak in the debate on the Charter of Budget Honesty Amendment Bill 2011, which has been put forward by the shadow Treasurer. I commend the shadow Treasurer and I commend the cooperation on the coalition's side that has led to this legislation being put forward. The government should think again next time when it says that the opposition is all about saying no, no, no, because this bill to establish a Parliamentary Budget Office is leading the way on reform and on how policy costings should be looked at with regard to government, moving it away from the executive and placing the power back with the parliament.

The idea was first put forward in May 2009 by the member for Wentworth, Malcolm Turnbull, when he was opposition leader. He was incredibly worried about the expenditure that we were seeing from the Rudd government which has now become the Gillard government. He was incredibly concerned by the level of spending and the way we were racking up debt for this country. He thought that the best way to provide analysis of fiscal policy would be the establishment of an independent Parliamentary Budget Office which could provide confidential advice. It was then supported, in June 2010, by the Leader of the Opposition, Tony Abbott. We picked up on this very good idea from the member for Wentworth and it became a coalition commitment—a very good one—which was taken to the last election. It has fallen to the shadow Treasurer to implement this policy, and he has done so.

It is rather sad to see how it is the opposition setting the agenda in the country today, because it was only after the shadow Treasurer put forward his bill calling for the establishment of a parliamentary budget office that the Treasurer decided that he needed to act as well. It is a bit like 'Wayne's world' at the moment—the Treasurer seems to operate in an area where he does not seem to have too many clues about what is happening in the country.

This was an idea put forward by the coalition in 2008. It was a coalition commitment taken to the 2010 election. We put forward a bill to establish the Parliamentary Budget Office last month. Then we saw the Treasurer finally deciding that this was an area that he needed to engage in. But, when he engaged, he missed the two key components that a parliamentary budget office needs. A parliamentary budget office needs to have confidentiality and it needs to have independence. Yet the Treasurer, with his bill, really set up a sub-branch of the Treasury and of the Department of Finance and Deregulation. It is a sub-branch that, if it were to do its work, would need to negotiate a memorandum of understanding with the department of finance and with the Treasury. This is somewhat of a joke, but it does not surprise me, when it comes to the Treasurer, that what he is proposing is somewhat of a joke.

The shadow Treasurer has put forward a model which is based on the US congress's Congressional Budget Office. All members who have visited the United States congress would know that that is a model which works. It works because it is independent and it is confidential. The Greens and Independents have made much of the need for us to set up a parliamentary budget office. I hope they have the common sense to realise that, if we are going to do this, if we are going to spend $24.9 million over four years to establish this office, we must set up an office which has teeth, which puts the power with the parliament, which enables the parliament to scrutinise the executive. These are all key components of a parliamentary budget office. This is what the shadow Treasurer has proposed. That is why the coalition's bill is far, far superior to what the Treasurer has put forward. I look forward to seeing the Independents and the Greens doing the right thing and supporting our motion.

Debate adjourned.