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

I move amendment (1):

(1) Schedule 1, item 16, page 7 (line 29) to page 8 (line 10), omit subsections 64E(2) and (3), substitute:

(2) For the purposes of performing his or her functions under subsection (1), the Parliamentary Budget Officer may prepare, or have regard to, either or both of the following:

(a) economic forecasts;

(b) budget estimates (whether at the whole of government, agency or program level).

(2) Schedule 1, item 16, page 8 (lines 14 to 29), omit section 64F, substitute:

64F Information gathering powers and secrecy

(1) The Parliamentary Budget Officer has the powers and obligations set out in Schedule 2.

This amendment relates to the Parliamentary Budget Officer. Schedule 1, item 16, section 64E(2) precludes the Parliamentary Budget Officer from preparing economic forecasts or preparing budget estimates. Proposed section 64E(3) states:

... the Parliamentary Budget Officer must use the economic forecasts and parameters and fiscal estimates contained in the most recent relevant reports ...

These proposed subsections essentially constrain the Parliamentary Budget Office to using only the official economic and budget forecasts in its work. So it cannot even use the Reserve Bank's data, which is official data that is often in dispute with the official data out of the Treasury. It cannot refer to any other economic information that might be published by HSBC, Deutsche Bank, Citigroup or anyone else. It cannot refer to any forecast coming out of the IMF or the World Bank. It cannot refer to any forecast coming out of the OECD. No, it would seem that this will clearly constrain its independent assessment or analysis of the economic or fiscal impacts of policy proposals.

The Congressional Budget Office, which is constantly assessing independent data from a range of different sources and providing considered, balanced advice to the congress, would be denied by this bill. This bill alone serves the interests of the Treasury and of the government. It does not serve the interests of the parliament because it is not allowed to use any official data other than that provided by the Treasury. As I know, the Department of the Prime Minister and Cabinet often does its own independent assessments of economic forecasts as well as from time to time forecasts of the budget. The Department of Finance and Deregulation undertakes similar forecasts.

These proposed subsections seem to be at total odds with the purpose of the PBO outlined in proposed section 64B, which states that the purpose of the Parliamentary Budget Office is to provide independent analysis of the budget cycle, fiscal policy and the financial implications of proposals. So I have moved that proposed sections 64E(2) and 64E(3) be omitted. I have moved they be replaced with a new section 64E(2), which gives the Parliamentary Budget Office the power to prepare its own economic forecasts and budget estimates or to have regard to existing economic forecasts or budget estimates as they see fit. This will allow the PBO to fully meet its objectives and provide a truly independent analysis of fiscal policy.

Again, I say to the Independents in this place: here is a classic example of where the government has put into the bill a handcuff on the PBO, attaching it to the Treasury forecasts and the Treasury forecasts alone, which is completely at odds with the intention behind the Parliamentary Budget Office. I am quite surprised that people would agree to that, given they want to have an independent Parliamentary Budget Office.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

The government does not accept this amendment moved by the member for North Sydney and there are a number of very good reasons why that is the position of the government. I say from the outset that it is important to note that the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill, which is currently before the House, has been the subject of ongoing consultation and a very extensive process, a process that has been expansive in its membership. It has involved a committee process. We had the Joint Select Committee on the Parliamentary Budget Office established to undertake an inquiry around this particular issue. It should be noted that the committee had wide-ranging representation. Indeed, that committee included the member for Sturt as the deputy chair, Senator Joyce and the member for Higgins. It is relevant to note that when that committee handed down its report the recommendations were unanimous. There was not a dissenting report. We now have, through the government's bill, a response from the government that adopts each of those recommendations in full. A series of amendments has been circulated and the member for North Sydney has now moved one amendment. I will address the issues raised by this amendment. The shadow Treasurer has moved an amendment in relation to this motion of allowing the PBO to undertake and to draw upon economic forecasts that would seek to expand the role of the PBO in a way that really does raise questions about what their approach to the PBO is. They seem to want to make this body all things to all people. On the one hand, we have the shadow Treasurer here saying that we should have a body that is drawing upon a range of forecasts. I think that it is appropriate and, indeed, the committee thought it was appropriate that the function of the PBO should be limited to drawing upon those established forecasts but in order to undertake the more specific function of the costings that it will put in place.

If we look at the joint committee and the outcomes of that process, we see that the joint committee in its report addressed this issue. They said:

Given the resource intensive nature of the work and the need to minimise the duplication of work produced elsewhere, the PBO should not be required to produce its own fiscal forecasts. Rather, it should provide analysis of the Government’s fiscal forecasts, commenting on the assumptions, judgements and overall reliability of Government assessments.

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

Why not?

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I hear the member for North Sydney say, 'Why not?' That may well be a question that he should pose to those members of the opposition that were on the committee that participated in the process that was set up and, through that process, supported in a unanimous fashion the recommendations that were brought forward by that committee. The government has adopted those recommendations in full. So, if the member for North Sydney has some concern about the reasoning of the committee, can I suggest that he takes it up with his colleagues before he opens the dirty laundry of the coalition in this place. There are important questions that he might want to bring to the attention of the member for Sturt, Senator Joyce, and also the member for Higgins.

I also make the point that in the questioning throughout the committee process, Stephen Bartos, the former Deputy Secretary of the Department of Finance, noted that it would clearly be a waste of resources for the PBO, or an independent outside body, to try to duplicate the efforts of the Treasury in doing those economic forecasts. He said:

There is a reasonable consensus that duplicating the work of the bureaucracy in preparing economic forecasts would not be a good use of resources; however, many stakeholders do see a valuable role for an independent body in validation of the forecasts and commentary on official fiscal documents.

Simply, I think this shows that the opposition is somewhat confused in terms of what it is now purporting to set out as being the objectives and the mission statement of the PBO. Perhaps it would better suit them if the PBO were not spending its time analysing opposition costings and embarking upon these more wide-ranging pursuits such as forecasting of the sort that they have recommended. The government does not accept or agree to this particular amendment.

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

What we just heard from the member for Lindsay was absolutely pathetic. He stood up here and said that he would detail comprehensively why the government disagreed with this amendment. He did not provide one reason. He did not analyse this proposal and justify the government's position. Like we saw with the costings at the last election, all he stated was, 'We have taken a decision.' It is not good enough. This government on two occasions now has gone to elections committing itself to transparency and to critical analysis.

This Parliamentary Budget Office was intended to be modelled on the Congressional Budget Office in the United States where there is a commitment to openness and an exhaustive examination of alternative proposals. How can we have an exhaustive analysis of alternative proposals if we are still constrained by absolutely the same assumptions, the same modelling, the same approach and the same prejudices that are articulated in the government approach? It is impossible for us, or any opposition for that matter—and hopefully you in the very near future. If you end up an opposition, you will want the opportunity to have your alternative policies tested in their fullness.

Mr Bradbury interjecting—

You had your chance. You did not provide one reason. This is a deliberate attempt to throttle the intended purpose of the Parliamentary Budget Office. From day 1, the government has sought to resist adopting this policy and, when it did adopt this policy, it was dragged yelling and screaming because, again, they wanted to accommodate—in this case for good reason—the Greens and the Independents. That was the only reason you adopted this policy. You would never had your heart in it. You are a wholly owned subsidiary of Treasury. You have followed their advice from day 1. Now, in this case, the unelected experts have a vested interest. If they have not got a vested interest in this one, who has got a vested interest in the advice that you have been given? You are unable to articulate one good reason why this alternative body should not be given the independence and the capacity to judge the relative merits of government proposals. As my colleague has said, the purpose of the PBO is to provide independent analysis of the budget cycle, fiscal policy and the financial implications of proposals.

We have seen over the last three or four years dramatic changes and dramatic differences between the forecasts. Even in the six months from MYEFO to this budget, we saw a change of $7.5 billion in the deficit—$7.5 in six months—and you are saying that this is an authority that must be accepted for all potential independent analyses. It beggars belief that you are not prepared to expose your policies and the backing of your policies to independent analysis and also, for the community's benefit, to put opposition policies through the scrutiny of alternative and independent analysis. This is a deliberate attempt to frustrate and head off the purpose of this Parliamentary Budget Office. This is a government that does not want transparency. It does not want critical analysis. It wants to dictate policy. All you talked about was consultation. This will provide no measure of detailed consultation. This Parliamentary Budget Office will have to reach memorandums of understanding with the other authorities. It will have to accept all of their numbering, figuring, assumptions and analysis. This government at every turn is seeking to avoid analysis and to turn a genuine policy opportunity into a political opportunity. It does not want to see legitimate analysis of our policies. It wants to play politics with the election process, the policy process and now this independent Parliamentary Budget Office. (Time expired)

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

I rise to support very strongly the amendment moved by the member for North Sydney because this is a fundamental aspect of ensuring you have a strong and reliable independent source of advice for the opposition and for Independent members of the parliament. Yesterday I spoke on this bill in this place. Following my contribution, the member for Lyne acknowledged that most people in this place think this is a good idea even though some—and Admiral Bradbury at the table is one—have come to this very late. We proposed this some time ago back in a budget reply speech. We all agree now that members of parliament having access to independent economic advice and costing advice is a good idea. It will improve the policy processes of this place. It will ensure that when we have policy discussions we are able to get access to the same sort of advice that the executive gets access to.

We heard from the member for Lindsay, who is the parliamentary secretary at the table, that we should not have a PBO with the right to have its own economic forecasting because we already have it done by another agency. In other words, they do not want any contestability at all for the advice. It is like somehow now the economists agree at all times and there is one font of all wisdom. I would be amazed to hear the member for Fraser make that point, because the member for Fraser has spent half of his life questioning economic advice. Quite often on blogs on the internet he debates with many like-minded economists about the minutiae of economic advice. Presumably, the member for Fraser is going to stand up and tell us that Treasury is the font of all wisdom and that everybody should accept Treasury, even though every single budget we have had from this government has never been right. Their numbers go up and up. We have been sitting here listening to Admiral Bradbury, the genius behind the border protection policy at the last election, tell us that Treasury is the font of all wisdom and we should never have any contestability because economists apparently always agree. What a load of baloney.

This is a really stupid attempt by the Labor Party if you think through the consequences. At some point they are going to be in opposition. The member for Lindsay may not be there yet, but he will be in opposition. It is wise to have an agreed formula in this place and it is good policy—and I said this yesterday—to have a strong independent Parliamentary Budget Office. If it is good enough for the Congress then why is it not good enough for us? If it is good enough to have contestable advice in the US, why is it not good enough to have it here?

There are good people in Treasury and they do a good job, but they sometimes—and with this government regularly—get their numbers wrong. The Building the Education Revolution started at about $14 billion and ended up at about $16.5 billion.

Geoff Lyons (Bass, Australian Labor Party) Share this | Link to this | Hansard source

It put a lot of people in work too.

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

It also wasted well over $1 billion. But what is $1 billion between friends of the Labor Party these days?

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Members on my right will desist from interjecting and the member for Mayo will desist from responding to the interjections.

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

Their budget forecasts year on year blow out by $20 billion, $30 billion and $40 billion. How much are we in debt these days? How much extra in debt are we than we would have been in the last budget? Of course, they occasionally get their forecasts wrong so what is the problem with having a contestability element to it? There is no problem at all, except it is not in the Labor Party's political interests. It is short-termism. It is politics at its worst. It is not thinking through the long-term political consequences for your political organisation. It will be a bad outcome if we do not accept the very wise amendment proposed by the member for North Sydney.

Members on all sides, including those on the crossbenches, think it would be a good outcome to have another form of advice for all members of parliament. I have heard much about how important the member of parliament is in this place, particularly 12 months ago from the member for Lyne. He is right. They should have a role in this place. They should be able to get access to information just as the executive does. The executive test their policies. They do not get their policies right every time—and when it is this government they never get their policies right. It should be the same for the opposition and for the crossbenchers. This is a good amendment. It should be supported. If the member for Lindsay has any foresight at all, he will support it.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

The real issue in question here is whether, as the government bill proposes, the PBO should have the capacity to rely upon the economic and fiscal forecasts that are prepared by Treasury and Finance. It is important and relevant to know that the agencies and departments providing advice to government are the same agencies and departments that will be providing advice to any future government and the very forecasts upon which they have modelled will be available and will be the benchmark upon which judgments and costings will then be made.

I take some offence at the comments of the member for Goldstein, who came forward and said that the contribution that I made earlier was pathetic. I do not expect applause from the member for Goldstein, but I find it extraordinary that, of all the members on that side of the chamber after the debacle that was the opposition costings of the last election, the member for Goldstein would come forward and talk about the politicisation of Treasury. Let us just remember that we have a Charter of Budget Honesty that was put in place by the former Liberal government—a Charter of Budget Honesty that places great trust and respect in the departments of Treasury and Finance.

We all know that those on the other side have a single-minded agenda when it comes to the Public Service because they have already indicated that, if they do not agree with them, they will sack them. We have seen it with the Department of Climate Change and Energy Efficiency and the member for North Sydney saying, 'We'll just shut the whole department down because we do not like the advice they're giving us.' Now we are hearing that they do not like the advice that Treasury gives them. Are they going to shut them down too?

I heard the member for Mayo, and it was good of him to contribute to the debate. I know that he is out there brandishing his wares because he was disappointed that he was not on the Joint Select Committee on the Parliamentary Budget Office. The joint select committee recommendations that were handed down were unanimous. They went through a thorough and comprehensive process and the recommendations they handed down were unanimous. I notice that the opposition members of the parliamentary committee are conspicuous in their absence: the member for Sturt and the member for Higgins. Neither of them are in here today because they went through the process and they know that the parliamentary committee handed down sensible and reasonable proposals that the government has adopted in its bill. We have this suggestion about shopping around for alternative forecasts. In the end that is what it is all about: they want to shop around for alternative forecasts; if they do not get the forecasts that they want, they can go shopping around for some more. The bottom line is that the Parliamentary Budget Office is going to be an independent—

Opposition Members:

Opposition members interjecting—

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! Members on my left.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

They love the notion of being able to shop around for an opinion that suits. We saw what they did in the last election—the $11 billion black hole that we all got left with; the black hole that only got exposed when the Independents had their policies independently costed by the Treasury. What did they do beforehand? They had a private accounting firm not cost but audit their policies. The member for North Sydney came forward and said, 'Oh no, this is properly costed.' Later on I remember Mr Lochnane had to come out and say, 'It wasn't really costed.'

Opposition members interjecting—

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! Those on my left.

Mr Hockey interjecting—

The member for North Sydney. Order!

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

The member for North Sydney does not want to relive this bad dream. It was a bad dream then and it is a bad dream now, but the Parliamentary Budget Office will strip away the ability to use those sorts of lame excuses in the future. (Time expired)

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

We truly have seen an example of why the seat of Lindsay will change hands at the next election. I think we should send out copies of that speech to all his electors. When the member for Goldstein said he was a boy on a man's errand, he was quite right. The reason that this debate is fast and furious is—

Mr Crean interjecting—

Oh, Simon, I thought better of you and there we were touting you for leader. We were putting odds on you, Simon. We were really giving you substance. What an unkind chap he is. But, rather than wasting time on Simon's eligibility for leadership, perhaps we will go right back to the Parliamentary Budget Office—

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. I would ask that you direct the member for Mackellar to refer to members by their parliamentary titles.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The member for Mackellar will be reminded to refer to members by their titles. In this case I am sure the minister for regional development would be a suitable title.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Is that what it is? It would be perfectly satisfactory because the point I want to make is this: the way in which the government has crafted this legislation is to make the Parliamentary Budget Office totally tied to the coat-tails of Treasury. We have seen Treasury become totally politicised under this government. What better evidence could we have than the fact that, when Treasury came out and said that there was a so-called black hole of $11 billion in our costing, it was because there was a disagreement on assumptions that were made which related to models that Treasury had which disagreed with others that were created.

The fact of the matter is that Treasury and the head of Treasury have been well rewarded. The former head of Treasury who performed this business, Mr Henry, has now been appointed, under section 67 of the Constitution, to a position on the Prime Minister's staff at a sum of $528,000 per year. The parliamentary secretary admitted in the consideration in detail of the appropriations bills that no job description had been agreed upon but the sum of money that he was to be paid had been agreed. Because it is under section 67 of the Constitution it will not be gazetted and we will not know the terms and conditions of his appointment, but we do know that he has been granted this very lucrative position on the staff of the Prime Minister's office.

If people are concerned that Treasury does not appear to be independent then the drafting of this bill proves the point. The agreement before the election was that both parties said that we needed an independent office that would give truly independent assessment and have the ability not to be constrained by the modelling of Treasury. But, because you have so politicised that office and because you have been seen to reward those who serve you faithfully, we now have this bastardised version which is in your legislation.

If you have any shimmer of decency left in you, you will support the amendments as moved by the shadow Treasurer, which will give some legitimacy to the bipartisan agreement we had before the election that this was a needed new office. Both parties went to the election saying they would have such an independent office, but once again—just as we have a Prime Minister who said there would be no carbon tax under a government she led—the independent office that you promised has now been made subservient and attached to the coat-tails of Treasury, which you have politicised and controlled. You have no shame if you bring forward this bill and send you, the member for Lindsay, to try to argue the case. I think it is a final insult that you do not even have anyone of seniority at the table. Perhaps the potential leader, the member for Hotham, over there could add some substance to the debate. Bring it on.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

What we have seen tonight is the opposition move from a discussion of the Parliamentary Budget Office into a full-blown attack on a federal Public Service agency. This evening we have heard attacks by the member for Goldstein on the Treasury. For what reason? It is quite simple: the Treasury found that the opposition's costings did not add up in the last election campaign. Now we have seen the member for Mackellar go further. The member for Mackellar tonight told the chamber: Treasury has become politicised.

Once upon a time we had Liberal and National parties who believed that the Public Service should not be dragged into debates in this chamber. But that has gone. The Liberal and National parties today believe that, if the federal Public Service disagrees with what they have to say, it is fair game for political attacks. This is, of course, the same opposition whose leader, when they were completely unable to find a single economist—just one—to back their climate change package, said, 'Maybe that says something about the quality of Australian economists.'

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

Mr Deputy Speaker, I would ask that you bring the member back to the issue, which is the amendment before the House, rather than trying to be a cheap-shot spray-master.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

It has been a very, very wide-ranging debate, which I have allowed on both sides of the chamber. The member for Fraser is reminded of the amendment before the House, but I have allowed a very, very wide-ranging debate.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. One of the amendments before us this evening is the coalition's suggestion that the Parliamentary Budget Office should have the power to carry out its own forecasts. Again, you can easily see why they would want an amendment like this. They went to the last election with an $11 billion hole in their costings. They are currently $70 billion behind in their economic policy. When you are in a situation like that, you play catch-up football. You want a set of forecasts that might, perhaps, just give you the numbers you want.

Hearing those opposite speak in the debate tonight reminds me of a mate of mine who had a pretty old car, about 15 years old, with a lot of rust underneath. We were in New South Wales, so the car had to be assessed every year. Every year he would go around to mechanic after mechanic and say to all of them, 'Do you reckon you would pass this for rego,' and they would say, 'No, I don't think we'd pass it.' So he would move on to the next one and the next one and the next one, until eventually he found a mechanic who would say that his car was roadworthy. That is what those opposite want. They want a few more chances to show that their election policies are roadworthy—a few more attempts to find someone, anyone, who will say that the coalition costings add up.

As the Parliamentary Secretary to the Treasurer has highlighted this evening, at the last election the coalition put up policies that were $11 billion behind. They took these policies to a firm of accountants who are now being investigated by the Institute of Chartered Accountants. The coalition are now $70 billion behind in their budget policy. They are throwing punches left, right and centre and this evening they are throwing punches at Treasury. They are saying that Treasury has become politicised.

The opposition are saying that, if we do not support their amendments to allow a new set of forecasts out there, they will not submit their policies for costing by the Parliamentary Budget Office or Finance or Treasury. The opposition are saying that, if we do not have a Parliamentary Budget Office that maintains secrecy—that allows them to keep their costings secret from the Australian people—they will not comply with the Charter of Budget Honesty. We are two years out from the poll and the coalition are already saying that the Charter of Budget Honesty is just another piece of paper to be torn up.

The Australian people deserve better than this. They deserve a debate over policies, not two sets of economic forecasts. The Australian people deserve transparency. They deserve a Parliamentary Budget Office that requires policies to be placed in the public domain, not hidden behind closed doors. They deserve an opposition that does not attack Treasury just because it fails to agree with them on a particular point. (Time expired)

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

I rise to support the member for North Sydney's amendment (1), which makes it very clear that what we are trying to achieve is to enable a genuinely independent Parliamentary Budget Officer to have regard to: 'either or both of the following: economic forecasts and budget estimates'.

I know that those opposite are quite partial to issuing talking points to everybody and expecting them all to just fall in line. Senator Cameron referred to that as a procession of 'lobotomised zombies'. I suppose what those opposite are trying to put past this parliament is the creation of a zombie Parliamentary Budget Office and ensure that it only does what the government wants it to do.

It is incredibly important that we have an independent and credible office that is able to support the members of this place and the other place in the important work they do in understanding the forecasts and the other issues that go to the government's budget estimates. I highlight in particular that every February, when appropriation bills 3 and 4 are brought into this place, the Minister for Immigration and Citizenship comes in here and asks for hundreds of millions of dollars extra—every year. Just this year in February the government came into this place and asked for $295 million extra for the blowouts in their budget. The figure of $295 million is interesting because for just six months that was a blowout that was bigger than the entire cost of running the Pacific solution for almost six years! At budget estimates we are never able to get an estimate of what their blowout is likely to be. It would be quite handy if there were an independent voice in this debate so that we are actually able to get a better handle on the misspending of the government and a better understanding of what the likely budget scenario will be, going forward.

You are never going to get it from this government. All you will get from this government are deceptions, and then they will hit the taxpayer with a massive big bill every February when they parade into this place and just simply ask for more and more money. Let me quote to you what the Congressional Budget Office's charter is to provide:

All the member for North Sydney is attempting to do here with this worthy amendment is to ensure that what is achieved in the Parliamentary Budget Office is what I have just read out in terms of the objectives of the Congressional Budget Office: to provide that independence for them to form their own view about what the budget outlook is, and to provide contestable advice, independently formed, that does not conform to the mantra and domination of a spin dominated government which likes to drive everybody into submission and to ensure that the only voice on economics and budget matters is the voice of the government.

That mantra might be appropriate in some countries but it is not appropriate in this one, where we have a parliamentary democracy which relishes the idea of transparency, freedom of information and a genuine and non-partisan view, potentially, about what these important matters are. We all want good information to base decisions on in this place, and we do not get it from the government because they hopelessly misbudget, going forward. In my area, as the shadow minister for immigration, they have blown their budget in the last two years alone by $3.2 billion. If we had access to a Parliamentary Budget Office that was actually tracking the expenditure and we were able to work with them to get a better handle on where things would go in the future we would be better informed to do the job that we were entrusted to in this place.

But this government does not want to do that. They really do not want to do that. They want another puppet on a string and another team of zombies to do their business because zombies are their business; zombies who come into this place and basically do what they want them to do.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

Are you calling the Treasury a puppet on a string?

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

The parliamentary secretary at the table is suggesting that somehow I am referring to the Treasury. I am referring to the Parliamentary Budget Office that you want to set up and to make captive to the government's forecasts and captive to the government's information.

This place should be free of the executive. I know that those on that side of the House want to have the executive dominate the parliament and dominate all the information that we might have access to. That is what this bill is about, and you just do not get it.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

It is with great regret that I see this debate on what is an important piece of legislation being used as a vehicle by those opposite to utter the most disgraceful and defamatory accusations against a highly respected public servant.

The fact that the member for Mackellar can stand in this place and use the parliamentary privilege to defame a man who has given years and years of his life to serve both sides of politics and to provide the highest level of economic and social advice to this country is nothing less than disgraceful. It is a spray that deserves an answer. It deserves an answer from those opposite. If they stand beside the member for Mackellar and the accusations that she has made in this chamber tonight then they, too, stand condemned. I say to the member for Mackellar that if she has the courage of her convictions she will not stand in coward's castle and make those accusations; she will go outside and choose to say exactly the same thing. That was nothing short of a disgraceful, defamatory spray on a man who has served this country very, very well. It does absolutely no service to either side of politics that they should allow this to go unanswered.

We are locked in a debate over a pretty important matter, and that is the formation of the Parliamentary Budget Office. You would think on the face of it that it is something that all sides of politics could agree with. Listening to some of the contributions to the debate, it would sometimes appear to me that all sides of politics think that this is an important initiative that should be agreed to. But then you listen to some of the objections and you have to wonder what the motives are that lie behind them.

Some of the objections really ring pretty hollow. After 11 years of government those on that side of politics did absolutely nothing, so the objections that they stand here and raise tonight are pretty damn hollow indeed.

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

What about the Charter of Budget Honesty?

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

The member opposite raises the issue of the Charter of Budget Honesty. It was an important piece of legislation that was introduced by those opposite but then shredded in the lead-up to the last election, where they did not have the guts to put their own policies out there for independent costing. We know why: there was an $11 billion black hole in their costings, because they cannot count. They have learnt nothing over the last 12 months because they are now arguing amongst themselves about how they fill the next big black hole in their budget costings—a $70 billion black hole in their proposed budget.

They do not like public servants, and we have heard from those opposite—the member for Goldstein and the member for Mackellar—that they do not trust them. We already know that they intend to sack 12,000 of them if they ever find themselves over on this side of the House. We can understand from the contributions of the member for Mackellar and others on that side that probably a whole heap of Treasury officials' jobs are on the line if those opposite get their way. They do not like public servants, they do not like the Department of Treasury, they do not like economists as a breed, they do not like scientists. In fact, the list of people that they do not like seems to grow by the minute. Basically, the only criterion needed to find yourself on the hit list of the coalition is to disagree with any of the policies that they have the temerity to put up.

Their list of enemies is growing daily because those opposite are waging a war on knowledge, a war on expertise, a war on science, a war on economists, a war on anybody who has the temerity to disagree with their ridiculous propositions. Their serious proposition to deal with climate change is going to lead to individual households being whacked with an additional $1,400 per annum. These are the sorts of things that they put up. Instead of being engaged in a serious debate about an important initiative, they are using this debate in a cowardly attack on high-ranking former public servants and anybody else who happens to disagree with their view of the world. I commend the bill to the House. It is worthy of the support of all members.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

It is pretty clear what is happening—a pager message has gone out: 'Bradbury is sinking on PBO'. So the member for Throsby came in wondering what PBO is and he tried to have a spray at just about everything that has absolutely nothing to do with the shadow Treasurer's amendment to the bill before the House, the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011.

PBO does not stand for 'pretty bleeding obvious' that Labor wants to gut the Parliamentary Budget Office. PBO is not 'pretty bleeding obvious' that the government only wants its view of the economic projections to be in the public domain. That is what the PBO is. The PBO is that it is 'pretty bleeding obvious' you guys do not want a Parliamentary Budget Office. What would happen if you had a Parliamentary Budget Office under the amendments that my friend and colleague the shadow Treasurer has put forward? The PBO could actually look at Treasury's estimates and if they were sound and rigorous, if their credibility stood up to a robust analysis, and if the assumptions that underpin them were sound, they could be used. There is absolutely nothing in the amendment that stops the Parliamentary Budget Office utilising the forecasts, economic trajectories and projections that Treasury produce.

What the shadow Treasurer is seeking to do is to allow the Parliamentary Budget Office to get some other advice if it chooses. What a novel idea that a Parliamentary Budget Office might seek to satisfy itself about the economic forecasts and modelling that it chooses to use to help to provide an independent service to this parliament! I find it remarkable that we hear this sanctimonious drivel from Labor MPs about so-called attacks on public servants that are not attacks at all. It is about accountability and being held to account for the statements and the actions of the government. But apparently it is okay to have a spray at a parliamentary officer. You cannot say anything about a Treasury official without getting a dose of parliamentary sooky la-la, but you can have a crack at an independent parliamentary officer overseeing the Parliamentary Budget Office. Why is that? Do you feel you need to sanctimoniously come into this place to defend only some public servants? Is it because a Parliamentary Budget Office would not be under the control of, or subject to, the spinmeisters of this horrendously incompetent government that they are somehow not deserving of respect? I think public servants deserve respect whether they work in the Treasury or in an independent Parliamentary Budget Office. They all deserve some respect, but let us work out what is actually going on here.

We have seen the international models, some of which allow such officers to create their own forecasts and some of which oblige them to use the average of private-sector forecasts as a starting point—all perfectly credible international models, but not in Australia. Why? Because the Gillard Labor government are not interested in an initiative that goes to the good governance of this country. They are only interested in what is good for them. What is good for them is not having someone shine a light on and bring a different set of academic and intellectual rigour to some of their economic forecasting and costings.

But let us dig a little bit deeper into what happens if we allow the government's bill to stand—and I direct my comments to the Independents who might be weighing up whether they want a genuinely independent and transparent Parliamentary Budget Office or what the government want, which is a PBO full of the apprentices from Treasury. The government want them because they are not fully fledged and they have to use the Treasury advice and do what the government want. Why might that be? I tell you why they want that. They want that because one of the economic documents would be PEFO, the document released after an election is called. Under the current arrangements, if the opposition or Independent members want to update their costings on the basis of PEFO, any requests made during the caretaker period are released to everybody. You may want to update your work on the basis of the most current information available but the government want to hogtie that process to PEFO, which means that advice during the caretaker period is free for the government to manipulate, misuse and distort to their own grubby political ends, further undermining the very purpose of the Parliamentary Budget Office.

I put it to you that PBO is that it is 'pretty bleeding obvious' you guys want to hollow the Parliamentary Budget Office out and undermine its contribution to the good governance of the country purely so it can be in your good interests. And the Parliamentary Secretary to the Treasurer, the member for Lindsay, the extra from Sea Patrol, is left to defend that despicable position. I can understand why the message went out saying, 'Bradbury is sinking on PBO'. You have offered nothing in this debate that challenges the very credible and sound arguments the opposition has put up. I commend the shadow Treasurer's amendment.

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

I make one further point on my proposed amendment to the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011. I think this point will be particularly interesting for the Independents and the Greens. The government's PBO forecasts will not be those of Treasury. They will, in fact, be those of the Treasurer.

Under section 64E(3) of the PBO bill, it is stated that the Charter of Budget Honesty Act schedule 1 provisions will apply. Those schedule 1 provisions identify that the budget economic and fiscal statements and the Mid-Year Economic and Fiscal Outlook are actually documents that belong to the government—the Treasurer and the Minister for Finance and Deregulation—not, in fact, the Treasury. So the Parliamentary Budget Office is going to be so independent of the government that it is going to have the Treasurer's forecast—not even the Treasury's but the Treasurer's! They are the only forecasts and fiscal outlooks that are acceptable to the Parliamentary Budget Office. If there could be a single symbol of how flawed this parliamentary budget office bill is, look no further than the fact that the Treasurer has pulled the wool over the eyes of the Independents and the Greens by actually putting in place a requirement that the only economic data that can be used by the Parliamentary Budget Office is the data that comes from the Treasurer—not from the Treasury, which the government is keen to hide behind, but the Treasurer.

I wonder about the member for Fraser over there. How do you feel about that? The only economic forecasts that the PBO can rely on are the Treasurer's forecasts, not the Treasury's. So much for damn independence. What a joke! Independence of the PBO? What a joke! Under this bill the only economic data they can use is that provided by the Treasurer—not the Treasury but the Treasurer.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I want to offer a few final observations in relation to the amendment. Some confusion has arisen in the way in which this debate has proceeded. Some have suggested that it is not open to the PBO, under the bill that the government has brought forward, to draw upon forecasts from others, to comment on forecasts from others or to provide some analysis in relation to forecasts of others. The bill ensures that, when it comes to the provision of costings, those provisions are to rely upon a benchmark or a baseline, and that baseline will be the forecasts that will be provided by Treasury and by Finance.

What we have seen in the course of this debate has been an attempt to obfuscate the real issues. I have heard a lot of discussion here about transparency and accountability, and I will remind those opposite of that as they seek to move a couple of the other amendments that I know are forthcoming. One of the points that I would like to make is that, when it comes to the question of the role of the PBO—

Opposition Members:

Opposition members interjecting—

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The member for Mackellar will remain quiet. The member for Goldstein will also. They are both out of their place in the chamber, as is the member for Dunkley, when they are interjecting.

Mr Billson interjecting—

No, you will remain in your place and remain quiet. The parliamentary secretary has the call.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

Thank you. I restate the point that these matters were considered by a committee. The membership of that committee that did involve some from the opposition side, who have happened not to be in the chamber in the course of this debate, because it would be embarrassing for them to do so. We have the member for North Sydney now coming in over the top and seeking to move amendments that run completely counter to the recommendations of the committee. I can only conclude that the reason the opposition are so determined to do that is that they want to load the PBO up with a whole range of other responsibilities—anything to keep it busy—so that it is not involved in the serious business of costing alternative policy proposals.

We have seen why they might have an objection and aversion to that: they got caught out last time. But they were not prepared to put their hands up and acknowledge that they were caught out. Instead we have had to witness tonight an unprecedented attack upon the independence of the Treasury. I noted that the shadow Treasurer stood by and allowed others within his ranks to mount what was a disgraceful attack. People should reflect upon these matters because, if they ever do get the opportunity to move into government at some point, they will need to rely upon the sound advice that comes forward from these public servants. Mounting attacks upon their integrity and independence serves no-one's ends in the long run.

In relation to the question of whether or not these particular forecasts are provided directly by the Treasurer's office or by Treasury, I think it is worth making the point that during the election the latest forecasts are the Pre-election Economic and Fiscal Outlook, and they are the forecasts of the Treasury, not the Treasurer. They are forecasts that are signed off by the Secretary of the Treasury. So they are not forecasts that are provided by the Treasurer's office; they are forecasts that are provided by the Treasury. It is imperative that, if we are going to have a system that allows for some comparison between policy costing options, we ensure that the reference point is one that is consistent. This bill ensures that that consistent reference point will be the forecasts that have been provided by Treasury and Finance.

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

In response to that point, you are absolutely right. PEFO, the Pre-election Economic and Fiscal Outlook, is the only document produced by the Treasury that has the Treasury's economic forecast and the Treasury's economic numbers. All of the other documents that the PBO will use are in fact the Treasurer's numbers. I have been there; I know what they do. They are the Treasurer's numbers, and when they are doing the so-called confidential analysis of policies before the issuing of the writs it will be based solely on the economic forecasts of the Treasurer. I know that in the past Treasurers have played with the economic growth figures in order to inflate income.

Mr Crean interjecting—

I could tell you. Paul Keating boasted about it, mate. In fact, there were numerous occasions on which Paul Keating, as Treasurer—

Mr Crean interjecting—

Keep pushing me! As Treasurer, Paul Keating admitted that he changed economic numbers from those provided by the Treasury. That is why it is so important that the PBO has the capacity to get independent forecasts, independent economic growth data and independent inflation data. It is so important for it to get independent unemployment numbers and to take an aggregate, even to the extent of relying on the Reserve Bank.

As we know, at various times during the recent financial crisis the Reserve Bank had different economic growth numbers to those of the Treasury. Therefore, that had a material impact on some of the forecasts and budget forecasts as they stood. I think we would want in this place to have a range of different sources of information and that the PBO could go to the Reserve Bank, the IMF or the World Bank and form an independent view about economic growth, inflation and a range of other data. But instead, under this bill, not just for election costings—which, you are right, are based on PEFO—but for every other activity of the PBO during the course of the year, the PBO is constrained to use the Treasurer's numbers, not the Treasury's.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The question is that the amendment be agreed to. Sorry, Member for Lyne, I missed you.

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

Thank you, Mr Deputy Speaker. I was not going to speak, but this is an important point that has been raised and I would seek some clarification from the government in regard to reliance on Treasurer figures throughout the whole three-year cycle of government and in relation to non-caretaker and caretaker roles. There has been a lot said in this debate, and I was going to let a lot of it slide. I take a view to defend Chris Pyne, Barnaby Joyce and Kelly O'Dwyer in the work that we all did in regard to the Parliamentary Budget Office and the committee work. At times we met after midnight, talking with the Canadian Parliamentary Budget Office and picking up a range of different examples from other jurisdictions.

It is wrong in this debate to say that this is all about trying to model the Congressional Budget Office: (a) it would not fit in this building—it is massive in size—and (b) it would cost an awful lot. So, within the $6 million budget constraints that we have in Australia—and within a Westminster system—we have looked around at other jurisdictions, and the comparison that I would refer all members to is the Canadian model more than the US model. That was agreed by all committee members of all political persuasions.

I would also let slide some of the attacks that I agree are unseemly in regard to the independence of the Treasury. If we are going to go down the path in this place of saying that Treasury is partisan in the work that it does, I think that is a path of no return, and I would hope that leaders on the coalition side—if not the shadow Treasurer then the Leader of the Opposition—will correct the record sometime soon in regard to the attacks on the independence of the Treasury. It is as important in opposition to defend the public service and defend the independent Treasury as it is in government.

I was also going to let slide the arguments around double handling in regard to forecasting. I think it is eminently sensible to have a default decision made by one independent body and that the independent Treasury be that body, so I can understand, within the $6 million allocation that we have got, that we would rely on the independent Treasury to be the default position for the macroeconomic forecasting. But, to be fair, this is a point that has been raised at the end of this debate and it does need to be clarified. Are this parliament and the members of this place going to be relying on the Treasurer's office as the clearing house, or will the PBO have direct access to Treasury for advice, therefore allowing members of this place to have confidence in the independent Treasury and the independent PBO for the advice being sought?

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The question is that the amendment be agreed to. The member for North Sydney.

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

If the parliamentary secretary is not answering, I am prepared to refer the member for Lyne to the key sections—

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

Only because he is incapable.

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

No, leave him. The question was about to go to a vote without the member being properly informed. Clause 64E(2) of the bill we are debating now says:

(2) The Parliamentary Budget Officer's functions … do not include:

(a) preparing economic forecasts; or

(b) preparing budget estimates.

If you go to 64E(3), which is what we are seeking to exclude, it says:

(3) In performing his or her functions under subsection (1), the Parliamentary Budget Officer must use the economic forecasts and parameters and fiscal estimates contained in the most recent relevant reports released under Parts 5, 6 and 7 of Schedule 1 to the Charter of Budget Honesty Act 1998.

I have the Charter of Budget Honesty here, containing statements from Peter Costello, and I refer you to box 2, which lists fiscal reports and their responsibility:

Report: Fiscal Strategy—Responsibility: Government

Report: Mid-year Economic and Fiscal Outlook—Responsibility: Government

Report: Pre-election Economic and Fiscal Outlook—Responsibility: Treasury/Finance

So the only document that has forecasts that actually belong to the Treasury is the one just before the election, which is required to be released, I think, 10 days after the writs are issued. In every other document the forecasts actually belong to the Treasurer. Under this bill before the House, they cannot go back to the Treasury; the only information they can use is that in schedule 1 of the Charter of Budget Honesty Act. It is emphatic and it is clear. That is why they are not responding.

Debate adjourned.