Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011. The bill provides for the establishment of a Parliamentary Budget Office and the appointment and functions of a parliamentary budget officer. The bill is based on the unanimous recommendations of the Joint Select Committee on the Parliamentary Budget Office.

The Joint Select Committee on the Parliamentary Budget Office was established shortly after the swearing in of the 43rd Parliament and was charged with the objective of examining the proposal to establish a parliamentary budget office, to report no later than 31 March 2011. The committee made 28 recommendations, from the broad recommendation to establish a Parliamentary Budget Office dedicated to serving the Australian parliament through to detailed recommendations as to how the Parliamentary Budget Office should be established to ensure appropriate authority, independence and accountability. The role of the proposed Parliamentary Budget Office, along with resourcing and physical location, was also dealt with in the committee's recommendations.

As a member of the Joint Select Committee on the Parliamentary Budget Office, I congratulate the government for acting promptly on the recommendations of the committee and for having this matter now before the parliament for legislative consideration. I heard the member for Goldstein complaining earlier in this debate that it has taken a whole 12 months to get to this point, but the fact is that within a matter of weeks after the parliament was formed this committee was established and it handed down its report at the end of March. In fact, it has only taken a matter of months for this legislation to be drafted to ensure that we can get the Parliamentary Budget Office up and running.

This bill seeks to amend the Parliamentary Service Act 1999, which governs the parliamentary departments, and other acts to establish the Parliamentary Budget Office and the position of the Parliamentary Budget Officer, as well as the purpose, functions and governance of the Parliamentary Budget Office. The bill covers the PBO, as it is known, to ensure that it will be independent and dedicated to serving the Australian parliament through the provision of non-partisan and policy neutral analysis of the budget cycle, fiscal policy and the financial implications of policy proposals. Through the PBO, the bill will enhance the credibility and transparency of Australia's already strong fiscal and budget frameworks and it will promote greater understanding in the community about the budget and fiscal policy. Most importantly, it will ensure that the Australian public can be better informed about the budget impact of policies proposed by members of the parliament, particularly during elections. The PBO will also help ensure that the Australian people are never again put in the situation they were at the last election when we saw the Liberal Party try to hide its $11 billion budget black hole.

It is important to take the House through some of the key elements of this bill. Firstly, the bill will establish the Department of the Parliamentary Budget Office as a fourth parliamentary department. It was noted by the joint select committee that the majority of proponents for a PBO strongly support establishing, through dedicated legislation, the office of the Parliamentary Budget Officer as an independent officer of the parliament, similar to the Auditor-General. The government supported this view. The functions of the Parliamentary Budget Officer are outlined in the bill's proposed new section 64E, which prescribes:

(1)    The Parliamentary Budget Officer has the following functions:

(a)   outside the caretaker period for a general election—to prepare policy costings on request by Senators or Members of the House of Representatives under section 64H;

(b)   during the caretaker period for a general election—to prepare policy costings on request by authorised members of Parliamentary parties or independent members under section 64J;

(c)   to prepare responses (other than policy costings) to requests relating to the budget by Senators or Members of the House of Representatives;

(d)   to prepare submissions to inquiries of Parliamentary committees on request by such committees;

(e)   to conduct, on his or her own initiative (including in anticipation of requests referred to in paragraphs (a) to (d)), research on and analysis of the budget and fiscal policy settings.

Proposed section 64F outlines what the arrangements will be for obtaining information from Commonwealth bodies. This bill will allow the PBO to access information from Australian government agencies through a negotiated memorandum of understanding in circumstances where the release of information is consistent with other legislative requirements, including being guided by the principles established under the Freedom of Information Act. This is consistent with recommendation 13 of the joint committee. The committee favoured a memorandum of understanding over a compulsion to provide information on the ground that it would facilitate more productive working relationships between the PBO and government agencies.

We have heard that the coalition is proposing amendments and that it has also submitted a private member's bill to give the Parliamentary Budget Officer power to direct agencies to provide information. The committee flagged concerns with providing these powers to the Parliamentary Budget Officer, including the potential for this to inhibit productive working relationships with government agencies. The coalition would give the officer powers to access information despite any other law and there would be no controls over the officer then disclosing information it receives to members and senators if it relates to their request. This is, of course, quite contrary to the coalition's arguments that there should not be costings released in relation to publicly released policy commitments during an election or policy costings requested by various members and senators, as outlined in the proposed bill. However, when the coalition talks about the powers of the PBO to get information from departments it is a very different story. It wants to give the Parliamentary Budget Officer full powers to investigate and to have no restrictions on disclosure of that information.

The committee considered that the relationship of the Parliamentary Budget Officer with government agencies would be crucial to its success not only because the PBO would require information and data held by government agencies but also because it may need the assistance of agencies in making the best use of that information and data. This is outlined at paragraph 4.103 of the committee's report. The committee goes on to state at paragraph 4.104:

Further, there may be instances where, by working together on the kinds of information required, the agencies can better understand the ongoing needs of the PBO. The relationships between the PBO and Government agencies might also evolve over time, possibly leading to greater efficiencies and enhanced products for Senators, Members and committees.

Despite this being the unanimous view of committee members from both sides of the parliament we have seen opposition members come before this chamber today arguing the complete opposite and putting up no argument as to why the comments, findings and recommendations made by the committee should not be followed.

Other key provisions proposed in this bill, importantly, go to costings. The first one is 64J, which deals with requests for costings of policies during caretaker mode. There has been a lot of discussion from opposition members who have spoken on this bill in relation to 64J and the public release, 64L. Clause 64J extends rights to have policies costed during an election. It allows for minor parties and Independents to get their respective publicly announced policy commitments costed by the new Parliamentary Budget Office. And 64L applies in relation to a policy costing request that is made under 64J before polling day during the caretaker period for a general election. Proposed section 64L(2) states:

As soon as practicable after a policy costing request has been made, and before polling day for the election, the Officer is required to release publicly the request and the policy costing.

This is the point that the opposition are so opposed to and are seeking to amend.

They believe that there should be an independent body. They believe in election costings, so they say, but they are arguing that these costings should not be publicly released. This goes against what the Liberal Party have believed in in previous decades, including when they were in government. In fact, in the explanatory memorandum for the Charter of Budget Honesty Bill circulated by Mr Costello on 11 December 1996, Mr Costello stated, in relation to the importance of transparency, 'The intention of part 8 of the charter is to make available to both the government and the opposition, resources of the departments of the Treasury and Finance during the caretaker period to cost election commitments so that the public can be made fully aware of the fiscal impact of such commitments.' Mr Costello also said:

This is the kind of reform which, when enacted, will be a permanent feature, making sure that Australia’s economic policy is run better, making sure that the public is kept better informed, making sure that there is transparency in economic policy in this country.

The member for Goldstein has argued today about what happened during the 2010 election. The Liberal Party's view is that the methodology of the costings was flawed and that they came under scrutiny through the media as a consequence of their costings. But the fact is that they are not standing here today arguing about the methodology of the costings, which is dealt with in a number of sections in this bill. They could have argued about the methodology and said what they believe in, despite what is set out in 64G relating to approaches et cetera to be used in preparing policy costings, but they are not. This is not about costings; this is not about methodology. This is about the costings of the Liberal Party's policies being released to the public. They believe in accountability and transparency when it suits them but when it comes to election time they just do not want anyone to know.

I have outlined some of the key reforms. There is some argument from the opposition in relation to policy costings outside of the caretaker mode. A number of members of the opposition have stood in this House today and tried to argue that requests by individual members and senators will be publicly released so that there is no confidentiality at all. They have argued around why this is wrong but they have completely ignored—I would say it is deliberate and if it is not deliberate they have not read the bill—the fact that the bill clearly states, consistent with the recommendations of the committee, that prima facie the Parliamentary Budget Office will release costings and requests publicly, but that is unless the member or senator makes a request that it be kept confidential—

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

Outside caretaker mode.

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

outside of caretaker mode. I hear the member for Mayo interject. The fact is that there are members, including the shadow Treasurer, who have stood here today at the dispatch box and tried to argue that no such provision exists. The shadow Treasurer tried to argue here that even outside of caretaker mode these things would be released. In fact, that is ignoring what the bill actually outlines.

The fact is the bill makes provision, consistent with the recommendations, for confidentiality. Those confidentiality provisions do not exist in one area, and that has to do with caretaker mode. Why? Because the government believes that it is extremely important that all parties who release their policies while we are in caretaker mode should also publicly release the costings for those policies. Major parties cannot run around and announce policies during caretaker mode and then not have to explain the costings to anyone. The public has a right to know what those costings are. The fact is that time and time again opposition members have stood up in this House today and argued that that information should not be publicly released. Why? They do not like what happened in 2010, when they were shown to have a massive black hole.

They do not ever again want to have their black holes shown up in relation to budget shortfalls or anything else. The fact is that the public have a right to know. The government is more than happy to put its costings up in relation to its publicly announced policies, as should the opposition. They should stop trying to use this bill, and their private member's bill, as a way of getting around that. This is not an opportunity. They should stand by what Mr Costello said when he introduced the Charter of Budget Honesty and looked at this area. He said that it is important to have this part of public policy be transparent. It should go on indefinitely. It does not matter who is in government it should be the practice that these costings are publicly released.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I enjoy following the member for Petrie and her contributions to this place and working with her on the Joint Committee of Public Accounts and Audit. But I will just bring her up on a couple of points that she made in her contribution to the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011. She made the point at the end of her contribution about the Charter of Budget Honesty and black holes. Of course, that was born of the great, famous Labor black hole from the 1996 election campaign, when the former Labor government did not tell the truth about the state of the budget leading into the 1996 election campaign, leading to the need for specific legislation to deal with the dishonesty of the former Labor government and to ensure that an opposition coming in to government would at least know before an election what numbers they might be dealing with, rather than being faced with a $10 billion black hole following an election, as the Howard-Costello team were when they were elected in 1996—as colleagues on this side of the chamber well remember.

The member makes an interesting point when referring back to former Treasurer Peter Costello and trying to make the political point that the Labor Party are somehow the holders of all virtue when it comes to pre-election costings of their policies. It was not so in government up until 1996, and it certainly was not so when they were in opposition.

This is an extremely important bill for the well-functioning operation of our democracy. It is very difficult on the opposition side of the chamber to undertake and develop significant policy reform in this country without understanding the fiscal costs of the policies. There is no doubt about that. I see the shadow minister for the environment sitting at the table. He of course has a very significant responsibility in a difficult area, and it is only fair and right that he, like other members of this place on this side, should have access to detailed and comprehensive information relating to the policies being considered for putting before the Australian people.

If we want to put the reforms into place in this country which will help our next generation and will help us all achieve what we wish—which is to leave this place in better shape than what we found it—we should be arming MPs on all sides with the tools to be able to do so, in my view. Such a reform was announced by the former Leader of the Opposition in a budget-in-reply speech some time ago. That reform is long past being necessary—it is now time for it to be enacted. It is a pity that it has taken the opposition moving a private member's bill in this place today for the government to finally get its act into gear. It has been a long time waiting for this bill, and the one we see before us today is a flawed version of what it should have been. Fundamentally and essentially what a parliamentary budget office should be able to do is provide independent and genuine third-party analysis of the fiscal impact of parties' policies, not just leading into an election campaign, in a caretaker period, but during the term.

The media and the general public are increasingly demanding, particularly right now, that those of us engaged in the policy debate begin to outline how we think the economic future and wellbeing of our country will be managed. That is an important debate for us to have, and it is an important duty of an opposition to outline its alternative. It is not possible to outline your alternative in a genuine, detailed fashion if you do not have the numbers—the advice, such as economic projections and modelling of the impact of your policies.

A political game is played on budget costings in this country in election campaigns, and we all partake in it. It happens at the federal level and at the state level. Inevitably, incoming governments find black holes. Inevitably, outgoing governments claim they are not there. People in general shake their heads in bewilderment. But if we want to have a stronger policies, if we want to have more discussion about necessary reforms—and I think right now we are at the beginning of a period where we are going to need substantial reforms to remain competitive in our country—we need the tools in this place to be able to operate effectively as members of parliament, as oppositions, as Independent members of parliament and as third parties, as well as the executive of government.

The executive of government has the high-quality tools available to it to do that job. We know the Treasury department is full of very competent, very smart people who understand the budget and the impact of fiscal policy very well. They do not always get it right, it must be said. Many times their projections are off; they are either short or long on the projections for revenue or expenditure—which is to be expected in a budget of some $350 billion. It is right and proper for a government to engage with its Treasury department, with its finance department, to get advice on policies that they are considering implementing through the executive process of government.

But, equally, it makes sense for oppositions to be doing the same with policy development. You do not get these things right at first blush; you need to go back and reconsider, to look at numbers and impacts. Things change. Numbers change. Forecasts come out half yearly about fiscal numbers and impacts of policies. So it is right that oppositions should be able to engage with an independent budget office and get the best information available and the best policies to present to the Australian public—because, ultimately, that is in all of our interests.

So the provision in this bill to take away confidentiality of requests for members of parliament when it is in caretaker mode is nothing but short-term politics by a government who desperately want to use the politics costing at the next election campaign without thinking through the impact it will have on their own political organisation when they will inevitably go into opposition in some stage in the future.

Reflecting upon this debate prior to speaking today, I was drawn to something that the shadow Treasurer and member for North Sydney made a reference to earlier, and that is that each of us in this place, on the Labor side and on the Liberal side, try and make it harder for the opposition—no doubt about that. I notice that Senator Nick Sherry, when he was Deputy Leader of the Opposition in the Senate when Peter Costello first moved the Charter of Budget Honesty, said:

The pre-election costings regime is … deficient in a number of respects … Only costings of previously announced policies is allowed—that is, policy decisions would have to be made on the basis of incomplete information and be announced.

That is exactly what the Labor Party is seeking to do with this bill, in that they are refusing confidentiality during an election campaign for their own political purposes—as if all policies are held in perpetuity, as if things do not change. They want to release all the information, even if it is a policy that you decide not to proceed with because maybe the information you have got from the Parliamentary Budget Office tells you you cannot afford to do it this time. In the future, with at least the next election campaign and most probably the ones post that, we will have policies from both major parties, I presume—certainly from our side—which will be about reducing the expenditure of government. They will be about reducing how much the government spend on programs. They will be not so much about more expenditure and spending promises, as we have seen in election campaigns in recent history. With the Greens, of course, we will have a whole series of policies which will spend a lot of money. It will be fascinating to see if the Parliamentary Budget Office can even estimate how much money some of their policies will actually cost.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

There may not be enough zeros.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

There may not be enough zeros and there will certainly not be enough ink in the money-printing machine at the Reserve Bank to keep up with what the Greens would like to do with the Australian budget. But, equally, I think that we should enshrine in this place the right of the Greens to get advice on their policies—and we should have done so by now.

This bill is flawed, however, and there are very good proposals by the member for North Sydney on how we can improve this bill. They are simple amendments which do three important things in the main, if we go back to the fundamentals of why we want a parliamentary budget office in the first place. The first area is to strengthen the functions of the PBO. I quote: 'These amendments seek to broaden the functions of the PBO to include preparations of economic forecasts and budget estimates. This will essentially broaden the scope of the PBO.'

Of course the Parliamentary Budget Office needs to provide economic data to the opposition, to the Independent members, and even to the Greens, on the state of the economy, on the impact to the budget of different decisions and different plans and the impact of decisions made by the Reserve Bank—because they are rightfully respected as an independent institution. These are all decisions which should be made on the best advice available. I think we all agree on that. The government's bill is flawed because it does not give the PBO enough room, enough scope, in that respect.

The second amendment by which we seek to improve this bill is to improve information-gathering powers and secrecy. Our amendments will strengthen the information-gathering powers of the government's bill and affirm the independence of the PBO. How can they get the information to do their job? If you have got a health policy with significant expenditure off the Commonwealth budget, and which will have big impacts on your fiscal decisions, the PBO must have the power to go to the health department and get the relevant information. It is quite clear and simple. If it is to be an independent and effective and genuine third-party analysis, that is an absolute requirement—it is a must. In that respect, this is a very good amendment being proposed by the member for North Sydney.

The government's bill requires the PBO to establish memorandums of understanding with every government department and agency. The PBO has no leverage over these agencies and departments and therefore it may compromise the PBO's access to the most up-to-date information for the costings of these policies. At the end of the day, we in this parliament should be the masters of our own destiny. I have heard the member for Lyne, who is in the chamber, talk about the sanctity of the member of parliament. If we are going to encourage this right and ensure this right—not only for the executive of the government but also for members of parliament, the Parliamentary Budget Office needs to have the powers so that they can do so. I say to the Labor Party: if you really think, 'This is a good idea in government,' think about it as if you were in opposition, because the wheel does turn in Australian politics, and rightly. It is a good thing that governments change from time to time, because it brings about a new generation of thinking and leaders. It has not been so great for the country since 2007, but that is the decision of the Australian people. Ultimately the powers that will be enshrined in this legislation will be for all of us into the future. With this bill we should be trying to put aside, as much as we can, the partisan nature of the politics of costings, and think about how we as political organisations can get the best available information so that we can put it to the Australian people.

The third area where we seek to improve this bill in a substantial way is by restoring the confidentiality to costings policies during and after the caretaker period. That is the point I was reflecting upon before. If you take away that confidentiality and you just plaster it all up on the internet, it is not something that you are doing to the executive. The executive will not be required to publish the considerations of the policies that they may be thinking about prior to an election. If you were intending to take to an election a tax cut which has a major fiscal impact over a long period of time, and if you are seeking this detailed information, and you put different scenarios to the Parliamentary Budget Office—like the government does with Treasury and Finance—that information would obviously show quite large differences, depending on the percentage cut that you wanted to offer. If that information or advice is not going to be confidential—whether it is given to the member for Lyne as an Independent or to an opposition party, or even the Greens—we should not participate in it. Why would you allow the potential situation where the other side of politics could use the information as a tool for their political quests rather than a genuine effort by elected members of parliament to try to find the right reform mix for the future?

This is a good idea. This is an idea which is well over its time. The former Leader of the Opposition, the member for Wentworth, first proposed this. It is not a new idea. It happens in the United States with the Congressional Budget Office. I am pleased that the Independents in their negotiations put emphasis on this idea, and I think it is something we should be putting in place. But this is flawed in three significant ways, and we can improve this bill. We can improve it not just for those of us who are currently occupying the seats that we do in the parliament but for all the Australian people and for the benefit of decent economic reform for our country for the future. I urge the government to think about, to take on board and to consider the amendments we have put in place, because they are good amendments to what is a good piece of legislation.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

I, like the former speaker, certainly welcome debate today on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011 and the Parliamentary Budget Office. I think the process over the last 12 months has been important in seeing parliament being able to, as best as possible, from here on make the best decisions based on the best possible advice. And the bipartisan agreement of 12 months ago is important in getting a parliamentary budget officer in place to allow that to happen. To enable parliamentarians to make the best possible decisions, we need to empower each other through a due and proper process. The process through which we have gone to get to where we are today has had elements of consensus about it, but today those elements seem to be fracturing a little bit and, for some reason, are being denied.

The agreement reached 12 months ago was important, and it was not just about whims. I certainly appreciate the pat on the back from the former speaker, but this was something that was agreed by all members in this chamber. It was an agreement made prior to the formation of government, on the 16th day after the election, that involved the Liberal and National parties, the Labor Party, Greens members and also the crossbenchers. So we all own this Parliamentary Budget Office and the Parliamentary Budget Officer when appointed some time soon. I think that is important. I would be concerned if this were getting positioned—as I have heard in some of the debate—as some sort of agreement struck with the Independents or the crossbenchers. It is not; this is very much a House of Representatives office and has that independent status, separate from Independent MPs.

An important part of the process was the committee inquiry that took place over the last 12 months. The committee involved representatives of all members of this chamber. I was involved in that committee. The National Party had a representative, with Senator Joyce. From memory, the Liberal Party had several representatives, led at the time by the Manager of Opposition Business in the House, Christopher Pyne. The government chaired the committee through Senator Faulkner, a longstanding member of the other place. Like his politics or not, I would hope that there would be agreement that he is someone who has a good, thorough and detailed understanding of parliamentary processes. There was agreement reached by all parties and the committee made some unanimous recommendations. What I see now turning into legislation today through this bill is a reflection of that bipartisan work that was done over the last 12 months.

I am therefore somewhat surprised by the private member's bill that has been introduced in parallel to this. I am surprised that we are going to see amendments to this from the coalition. I am deeply concerned by the words of the member for North Sydney, which could be taken as a threat to the Australian people, that if the coalition do not get their way today with respect to amendments or if they do not get their way with the private member's bill, they are not going to play anymore and that the issues that are of concern to the Australian people at the next election will not be costed and those costings will not be available. That should be of deep concern to all members in this place, particularly those who have invested heavily in the process of trying to get consensus on an independent parliamentary budget office as an arm of this chamber for members of parliament to reach sensible decisions for the long term.

We have lived through this. During the last election, one of the key issues in forming government was in trying to get access to election costings through the Charter of Budget Honesty process, introduced in 1998 with all the good intent in the world—but at the last election we saw the Australian people denied the opportunity pre election to see the true costings of election promises. One of the tests to form government was to break caretaker conventions post election and ask for the costings done by the independent Treasury and independent Finance and get them looked at. That is a process that should have happened pre election, but it did not. The Australian people therefore went to the ballot box blind to the true costings of both sides.

I have not heard anyone criticise the independent Treasury advice, nor have I heard anyone criticise the independent Finance advice at the time. In fact, even today, a year after that process, the shadow minister for finance said—I think these were the words—'Treasury identified a few potholes to repair.' That is an admission that there were potholes. That is an admission that this whole process needs to happen pre election, not post election. The Australian people deserve to know where the potholes are that need to be repaired.

If we are investing well in Australian people being allowed to participate in this process in caretaker times around elections, preferably before elections, those costings should be public. This was discussed at length through the committee process and was unanimously agreed upon as a sensible contribution to better policy outcomes and more consideration for the Australian people. I therefore do not know what is going on in the mind of the member for North Sydney in trying to build an argument that this is somehow a fix on the coalition or the opposition. I do not understand what is going on in the mind of the member for North Sydney when he threatens the Australian people by saying, 'We will not submit our costings to anyone—neither the Charter of Budget Honesty nor the Parliamentary Budget Office—if the coalition does not get its way today to have confidential conversations and costings in that four-week caretaker election period.' I hope the Australian people rally strongly against that.

Outside the caretaker period, by all means, as per the legislation before the House today, those conversations for all members can and should be confidential, but when we are in pre-election mode it should be honesty tested in the public domain to ascertain what is being promised and what the true cost is to the Australian taxpayer. I think that is fair and sensible. I never thought I would hear myself saying it: in defence of Senator Joyce and Christopher Pyne, I hold true to what the committee that they were part of agreed on and uphold the principle that the costings at election time should be in the public domain. Indeed, going back another step, in defence of the member for Warringah, the Leader of the Opposition, in defence of Christopher Pyne and in defence of the group hug, I hope we accept that what is contained in this bill is essentially what, in a consensual, bipartisan way, was agreed upon by all members or their representatives through the process to date.

The bill before the House is sensible. I would have thought that it had the broad support of the members of this chamber. I would have thought the real challenge is to make sure that we get a parliamentary budget officer who has gravitas and the strength and independence of mind to make sure that they deliver on behalf of all of us, whatever our political bent. I would hope that we keep the Presiding Officers honest in the selection process, get a good job description in place and make sure the terms and conditions of that appointment are really in the interests of the parliament.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I hope the member for Lyne is not reflecting on the Presiding Officers.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

No, I am not; in fact, I am trying to endorse the status that you hold. I want the office of the PBO to be one that has gravitas within the processes of the parliament.

It is concerning that, as soon as the legislation hit the House, the smear campaign seems to have begun.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Link to this | Hansard source

This was going to be 10 minutes!

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

I will finish. We seem to be hearing the suggestion that this is some sort of sleight of hand by the government to stitch up the opposition in election time. That is not the case. This has been through a thorough process with coalition members, crossbenchers, the Greens and the government. I hope that is now reflected by broad support for this bill, with amendments being withdrawn and the private member's bill also being withdrawn, and that we allow this office to have the gravitas that it deserves to do the job on behalf of all of us so that we get the best possible policy with the best possible advice from the PBO that we seek.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

I am pleased to have the opportunity to speak on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011. This bill amends the Parliamentary Service Act and the Charter of Budget Honesty Act. The question before the House this afternoon is not whether it is a good idea to have a parliamentary budget office. We are all united in the view that to have a parliamentary budget office is a good idea, and I am very pleased to join the member for Lyne in saying that. Nor is the question whether there is a good case to have an extra source of independent advice to the parliament on financial and budgetary matters. That is clearly a good idea.

The question before the House is simply this: does the bill before the House contain practical measures which live up to the principles that we have all expressed our support for? Establishing a parliamentary budget office was, after all, a key election commitments by the coalition. On this side of House we are very clear in our support for the principles. Those who have not had painful experience with this government might naively assume that, because this government has brought forward a bill purporting to establish a parliamentary budget office, this government is also committed to the principle and has implemented through the bill detailed measures which will give effect to an independent source of advice to the legislative branch of government in relation to financial and budgetary matters. Some might say that this is a case of the marketplace of ideas at work—the coalition's idea of a parliamentary budget office being taken up by the government consistent with the agreement that was reached with the Independents approximately one year ago.

I am sorry to say, however, that long and bitter experience of dealing with this government, particularly this Treasurer, requires very detailed scrutiny of the measures contained in the bill before one can be satisfied that those measures do indeed, in their totality, give effect to a scheme which will implement the principles that have been agreed to. It is noteworthy that we have had a series of speeches from Labor members of the House about the principle of a parliamentary budget office. That is not the question before us. Nobody is disputing the principle. The question before this House is whether the specific measures contained in the legislation we are considering will be of practical utility in providing effective independent advice to the legislative branch of government in relation to budgetary and financial matters.

I am sorry to say that there are good grounds for believing that the government's strategy here is to roll out something which claims to achieve worthy objectives but, on closer scrutiny, does not do so. One might well ask why it has taken a year before this legislation was introduced when an agreement in principle was reached between the government and Independents one year ago. Certainly that delay in timing adds to the degree of intelligent scepticism which we on this side of the House bring to our consideration of this bill.

I want to make three points in the brief time available to me. The first is to endorse the principle that a parliamentary budget office can improve the functioning of the legislative branch of government. The second is to point out that on the details of this piece of legislation there are specific flaws in what has been proposed. Third, I want to make the point that the coalition has suggested specific changes which could be achieved through either supporting the private member's bill introduced by the member for North Sydney or by accepting amendments to be moved by the coalition.

Let me turn to the first point, that as a matter of principle a parliamentary budget office can improve the functioning of the legislative branch of government. The executive branch, the Prime Minister and her ministers, have all of the resources of the bureaucracy available to them—all of the great departments of state, with their many thousands of employees. Those resources, when it comes to financial and budgetary matters, and when it comes to other matters, are not available to the legislative branch. That is so under the separation of powers doctrine which governs the operation of government in Australia and that of other countries derived from the Westminster system. Yet the legislative branch has crucial functions in our system of government. If it is to discharge those functions effectively it makes sense for it to have available to it expert advice on budgetary and financial matters.

If legislators, if members of parliament, do not have available to them an authoritative, a trusted and a confidential source of advice to assist them in understanding the costs and revenues associated with proposed and current policy measures then they are operating at a significant disadvantage. The establishment of a parliamentary budget office could cure that disadvantage. It is for that reason that in jurisdictions such as the United States and Canada there are similar offices in operation. One need only look at the broad range of issues confronting this parliament today to identify many areas where it would be enormously helpful to have available independent and impartial advice on such matters. It would be enormously useful to know whether the accounting treatment of the National Broadband Network, under which some $19 billion is to be spent by 2015—none of which is included in the published budget deficit figures—is in fact a valid accounting treatment. It would be of enormous value for the legislature to have available to it independent advice on that matter. It would be of great utility to have independent advice as to the credibility of the projected $3.5 billion surplus, which we keep being told is something that we can confidently expect to roll around, not this financial year but next financial year, following only four years of yawning, gaping and repeated deficits. It would be of tremendous value to know whether this claimed sliver of a surplus, promised in the future, is in fact something to which any credibility at all can be attached. It would be of enormous value to know whether the extraordinary increase in tax revenues projected in the documentation issued by this government is credible, because of course if it is not credible then every aspect of this government's fiscal strategy is shown to be deeply wanting.

Such advice would be of great value to all parties but particularly of value, first of all, to the opposition and, second of all, to the Independents and minor parties who may not otherwise have available to them credible advice on these kinds of matters. If a parliamentary budget office is to be effective in achieving its stated objectives, then there are certain key requirements that must be met. Its independence must be beyond question and any parliamentarian who goes to this office seeking advice must have confidence that the advice that he or she requests will remain confidential. If there is any degree of suspicion that the request for advice or the substance of the advice that was provided is going to end up on the front page of a newspaper the next day, then all confidence in that office and in reliance upon it will be lost.

This office and the services provided by it must be available at all stages of the electoral cycle, including most importantly during the course of elections rather than, as is mysteriously proposed, having the availability of confidential advice turned off during the caretaker phase—that is to say, during the election process. This office must have the resources and powers available to it to get the information that it needs. Finally, if it is to be meaningful, it must do more than simply replicate arrangements which are already available—for example, under the Howard government's path-breaking Charter of Budget Honesty reforms.

I turn to the next point I wish to make, which is that there are key flaws in what is proposed in the legislation before the House this afternoon. The Parliamentary Budget Office will not have real independence from Treasury and Finance—those great departments of state—because the Parliamentary Budget Office will be required to make arrangements in writing under section 64F to obtain information from those departments and others. Remarkably, the Parliamentary Budget Office is prevented from preparing economic forecasts and budget estimates. This is a truly novel and ingenious approach to the concept of a parliamentary budget office—it is not allowed to prepare budget estimates! It would open exciting new possibilities in legislation if we were to replicate this approach in other areas. We could establish a defence department which was not allowed to defend Australia, a health department which was not allowed to take action to promote health or a department of veterans' affairs which was not allowed to deal with anybody who is a veteran of war service! These suggestions are as self-evidently ludicrous as it is self-evidently ludicrous that a parliamentary budget office would be specifically prevented from preparing economic forecasts and budget estimates.

I have already spoken about one of the other gaping flaws in this legislative scheme—that is, there is no confidentiality connected to the advice provided by this office during election periods. This is the very time when it is most critical to ensure that the Parliamentary Budget Office is available to serve as a trusted resource to parliamentarians. If we are to improve the quality of policy proposals put forward by non-government parties, which is surely an important objective in having a parliamentary budget office, then preserving confidentiality is an absolutely critical requirement. Of course, there are also serious flaws in the fact that the Parliamentary Budget Office is limited in its powers to obtain information. It is required to make arrangements in writing with the head of a Commonwealth body to get information and documents. What is left unclear and unspoken is: what is to happen if the relevant body refuses or imposes unacceptable terms? I want to put to the parliament the not-particularly-surprising suggestion that departments may well be resistant to providing information on an open-book basis. Therefore it is important to have appropriate measures in this legislation to ensure that the Parliamentary Budget Office can get the information it needs to do its job properly.

The third point I wish to make in the time remaining to me is that the approach proposed by the coalition in the private member's bill introduced by the member for North Sydney and, alternatively, in the form of the amendments which we are going to move is much more sensible. Under our model, the Parliamentary Budget Office is an independent statutory authority with strong powers to obtain information from government departments and agencies and the power to provide analysis of economic forecasts and budget estimates. There will be no need to sign memoranda of understanding with government departments. We are empowering a parliamentary budget office under our model to provide objective and impartial advice and, most importantly, to maintain confidentiality during election campaigns so as to ensure its effectiveness as a source of objective and reliable advice and in turn to improve the quality of policy proposals that come forward.

The issue before the House is not the principle; we are all in support of the principle of a parliamentary budget office. The issue is the specific deficiencies in the bill before the House. The coalition has brought forward changes to correct those deficiencies. (Time expired)

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I too rise to speak on the Parliamentary Budget Office Bill 2011 and the Charter of Budget Honesty Amendment Bill 2011. The aim of these bills is to establish, for the first time in Australia's history, an independent parliamentary budget office. As our previous speaker most eloquently said, 'The coalition is not against the notion of a parliamentary budget office, a PBO.' We see it as a very important part of any Westminster system. Of course, an opposition is as good as its information and access to confidential advice. We are most concerned that in its present form the proposal being put forward by this government does not in any way serve the Westminster system or the democracies as we know them in Australia.

While the Independents and Greens might at the moment enjoy the luxury of having access to confidential, informative and expert advice, under the proposal before us in this bill, an opposition of the day unfortunately would not. That might make sense while this Labor government is in the Lodge. But they need to think forward—perhaps not too far forward—and see a time when they, in opposition, would very much want to have access to confidential, expert budgetary information, costings and assessments. Their information and requests would not become a political plaything of the government of the day.

We have had some extraordinary examples in very recent times when we, the opposition, estimated the debt from not proceeding with the NBN by using the Commonwealth 10-year bond rate as the discount rate. Everyone will remember that that information was then made much of by the Labor benches, who said that what we had indicated was an enormous 'black hole' and that this had to go to the credibility of the coalition and our capacity as economic managers. In fact, it turned out in discussions after the election that Treasury had used a different, lower interest rate; but they did not tell the coalition at the time that their interest rate assessments were different to those used by the coalition. This led Treasury to estimate a lower quantum of savings for the coalition proposal to cancel the NBN. At the time Treasury officials would not explain to us what they had done. All we had was the media feasting on the notion, fed to them by the Labor Party, that we had a 'black hole'. That is an example of how politics can make use of—for example—an inadequate parliamentary budget office. We do not want to see that happen in Australia. We think it is a cheap stunt, and it does not do any great credit to the government of the day. There are in fact two bills before the House to establish a parliamentary budget office. The coalition introduced a private member's bill through the shadow Treasurer on 22 August this year. The government then introduced its own bill on 24 August 2011. The government is urgently trying to bring this bill forward to a second reading before our private member's bill has been put to a vote. I am sure that, if the Independents and the Greens looked hard at these two bills and compared the safeguards that are built into both, they would really understand that what we are proposing is a great step forward in real budget honesty. A government member, an opposition member, an Independent or, indeed, a private member would be able to use a confidential parliamentary budget office with confidence if it were constructed as we proposed in our private member's bill. What they put to the PBO would not simply become a political plaything of the government of the day.

This is a very serious matter. We have a need for confidential service that one can take whether one is in opposition, a minor party, an Independent or a backbencher—a PBO where you can take a request for assessments and comparisons and where the timing for the release of that data is still with the requestor of information. The new body that we are proposing would be accountable to the parliament, not hostage to government departments. We see that as a very important component of our shadow Treasurer's motion.

I am very concerned. I mentioned before that our estimates made before the last election were used as a political plaything when we did not have the best advice from Treasury about how they had dealt with the assessments made and published. I very recently had cause for great concern in my electorate, where we had exceptional circumstances: exit grants for drought relief. We were told that these were fully costed. They were a carefully budgeted program. We were told that, due to the demand for these exit grants, the program would be extended to July next year. We trusted that this government had got good advice from Treasury and the appropriate department to know that it had the funds to take through to July next year this program of support for farmers forced to leave their farms.

Farmers, particularly in my area, where they have survived seven years of drought and now a year of floods and an extremely financially stressed situation were told by Centrelink and by their accountants, who in turn were consulting Centrelink, that they had until next July to put in their applications for exit grants which would give them retraining through some $10,000 of support and also some $150,000 to try to re-establish beyond their farms. As a result of being told that they were not only eligible but had been granted this exit fund, some farm families then sold their properties at less than what they should have—in some cases, $80,000 less—because they understood that the $150,000 grant was literally a cheque in the mail. You can imagine the horror when they received phone calls from the local Centrelink officers in Echuca, Shepparton and Bendigo. They were being told over the phone: 'Sorry—we know that we had led you to believe this grant was forthcoming. It was budgeted through to July next year, but it is now summarily ceasing. In fact, as you receive this phone call it is all too late.'

This is an example that asks how that budgeting was done. How was Centrelink communicating with the department of agriculture in saying this number of grants had been deemed eligible and then granting the $150,000 plus the other $10,000 for training? Clearly we need much better budgeting and budgeting information for the government of the day. I hasten to say, though, that no coalition government would get anything as wrong as the EC exit grants debacle. I have in my electorate now farm families who are destitute as a consequence of selling their properties, having their clearing sales and ordering alternative accommodation—in some cases, caravans—to live in. They cannot pay for those caravans and are left literally destitute because of bad government policy reckoning and the extraordinarily difficult problems the government have created for their own Centrelink officers, who are now being accused of literally, in some senses, driving families to suicide.

I have to say that this particular PBO—parliamentary budget office—is an excellent idea but only if it operates in a way which delivers confidential service. If it leaves the call of when information is released up to those who have requested that information, does not become a plaything of the government of the day and does not mean that an opposition, Independent or backbencher would hesitate before using the PBO, this excellent idea will become an excellent reality. But we are so concerned about the PBO as a coalition that, should our bills or our amendments fail, our shadow Treasurer has already put on notice that the coalition will not submit its policy costings to either the Treasury or the PBO during and after the election period if the PBO is constructed in the way this bill proposes. It is that serious to us. We are very serious about good, independent, confidential Treasury advice.

We believe that a good PBO is part of good government, and we feel that this is an incredible example of how this government fails to understand the basics of proper budgeting, of proper ethical behaviour in the Westminster system and of the opposition's right and democracy's need to have a strong, well-informed opposition. I strongly recommend the government consider very carefully the amendments which we will be putting and also the private member's bill which now may be rushed out of the way by the government's bill. The PBO as proposed is just not good enough for a country like Australia.

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

I rise to speak on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011 because this is a very important matter for this parliament. The creation of a Parliamentary Budget Office is something that the coalition took to the last election, noting that it was critical that we have world's best practice here in Australia. This is something that the rest of the world has embraced an independent body that can look properly and closely at budgets and provide impartial advice on them along with major policy announcements and costings. We knew it was necessary for this country, which is why we took it to the last election.

We took it to the last election and it was embraced, as we know, by the Independents, who made an agreement with the government to ensure that the government would bring forward a parliamentary budget office. The Independents understood that it was important that there be an independent body that could provide impartial advice and analysis. It would be a body through which we would be able to look very deeply at the Commonwealth budget, major policy announcements and costings; a body which would have the power to get the information to be able to provide those appropriate costings; a body which would have appropriate funding to do all of those things.

The members for Lyne, New England and Denison as well as the Greens agreed that setting up a parliamentary budget office was an appropriate course of action. Of course, the government did nothing on this even after the Joint Select Committee on the Parliamentary Budget Office delivered 28 unanimous recommendations for the implementation of a parliamentary budget office. The shadow Treasurer was forced to bring forward his own bill on this matter on 22 August, which of course then spurred the government into action.

The shadow Treasurer's Parliamentary Budget Office Bill 2011 seeks to establish a parliamentary budget office that would be:

This was the bill that we brought forward, and the government then brought forward its own bill to establish a parliamentary budget office. Sadly, the government bill is not sufficient to provide an independent parliamentary budget office which has the appropriate powers to do its job.

Today I take the opportunity in the time available to go to the very heart of the key differences between the government's bill and the bill that was proposed by the shadow Treasurer.

First and foremost is the independence of the Parliamentary Budget Office. It is incredibly important that the Parliamentary Budget Office be entirely separate from and not dependent on the advice of the Department of Treasury or the Department of Finance and Administration. Under our bill it would be. We would establish a parliamentary budget office that would be very much separate from the departments of Treasury and finance.

By contrast, the government would establish a parliamentary budget office that would require the Parliamentary Budget Office when making requests for information to formalise those requests in writing in order to be able to get the appropriate information and documents. The government's bill would prevent the Parliamentary Budget Office from preparing its own economic forecasts and budget estimates. However, under our bill, the Parliamentary Budget Office would be able to prepare its own forecasts and budget estimates, and it would have the power to compel the production of the information it requires in order to do that. There is a very serious difference here in the independence of the parliamentary budget offices that are proposed. We believe that, if the aim is to have an appropriately independent budget office, our bill is superior to that of the government.

The second issue goes to the powers granted to the Parliamentary Budget Office to obtain information. The government's bill requires the PBO to stipulate what information it may require, and under it the PBO would rely on the departments of Treasury and finance in order to obtain that information. Under our bill the Parliamentary Budget Office would be able to obtain that information and not be constrained by government departments wishing to protect their positions or agreements.

Under our bill we would have the opportunity to have full, frank and fearless advice from the Parliamentary Budget Office. Under the government's bill it would not be full, it would not be frank and it would certainly not be fearless, because it would be reliant upon the Department of the Treasury and the Department of Finance and Deregulation. This would not provide the independence that a Parliamentary Budget Office would require if indeed it were to be anything other than a Parliamentary Budget Office in name only.

The government's bill restricts the functions which can be performed by the PBO. It specifically prevents the PBO from preparing economic forecasts and budget estimates. It seems at odds with what the minister himself said in his explanatory memorandum—that is, that there was an established mandate of the PBO:

… to inform the Parliament by providing independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals; …

So the government bill seems to be at odds with the explanatory memorandum that has been brought forward. There is no such problem with our bill.

The coalition's PBO would be able to provide objective and impartial advice on the Commonwealth budget and the budgetary cycle, including the impact of major policy announcements. This is critical, of course, because it goes to costings, to the announcements made by the government and to the impact on the budget bottom line.

The next point is about the confidentiality of the costings performed during an election period, after an election period and about when the issue of costings is raised with the Parliamentary Budget Office around major policy announcements. Under the government's proposal, there will be no confidentiality safeguard imposed, which means that, when the second a member requests information regarding costings, that information will be made public with no opportunity for discussion or to understand exactly how the Parliamentary Budget Office has arrived at its costings conclusion. This is important, because if we seek to have good policy in this place then it is important to understand the position that has been arrived at, to ensure that appropriate costings are brought forward and that they reflect the full policy position of the member or party that has brought forward those costings. They should be released at a time when the member or the party itself believes it is appropriate to release those policy costings. Under the government's bill, this would not be the case. Under the coalition's bill, confidentiality would be preserved, which would mean again that a full and frank exchange could take place with the Parliamentary Budget Office until such time as the costings were done in an appropriate and rigorous manner which reflected the announcements made by either the member or the party concerned.

These are a number of aspects of key differences between the proposal that has been brought forward by the government and that brought forward by the coalition. It is critical that we build on the Charter of Budget Honesty, which was a great measure brought forward by this side of the House to have full and transparent policy costings on the budget process. Indeed, we believe that the Parliamentary Budget Office will build on those very strong foundations. But the only way that it can build on strong foundations is to ensure that it is independent and has appropriate ability to obtain information—appropriate powers so that it can perform its functions—and to preserve confidentiality so that people will in fact use the Parliamentary Budget Office in the role for which it is intended. These are the reasons we support the coalition's bill rather than the government's bill. These are the reasons we will be bringing forward amendments to the government's bill. I commend the coalition's bill to the House. The government's bill has deficiencies, as I have outlined. Those deficiencies can be overcome with amendments, and we commend our amendments to the House.

Debate adjourned.