Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

On behalf of the shadow Treasurer, I rise to speak on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2013. The coalition is supporting this bill. This bill amends the Parliamentary Service Act 1999 to give the Parliamentary Budget Officer the function of preparing a report, including costings of the publicly announced policies of the designated parliamentary parties, within 30 days after a government forms following a general election.

Let me begin with some history. The establishment of a parliamentary budget office was a coalition election commitment in the 2010 federal election. The establishment of a PBO was also a key element of the agreement between the government and the member for Lyne, the member for New England and the member for Denison, along with the Greens. On 23 March 2011, following the federal election, the government established a joint select committee inquiry into the proposed parliamentary budget officer, which subsequently recommended that the PBO be established. The coalition pushed ahead and introduced its own version of a parliamentary budget office on 22 August that year and the government immediately followed and introduced its own legislation. The government introduced its own bill into the parliament on 24 August 2011 and it is this bill which is now being amended.

The PBO currently performs services across five functions. First, it prepares policy costings on request by parliamentarians outside of the caretaker period. Second, it prepares policy costings on request by authorised members of parliamentary parties or Independent members during the caretaker period. Third, it prepares responses other than policy costings to parliamentarian requests relating to the budget. Fourth, it prepares submissions to inquiries of parliamentary committees at the request of committees. Finally, it conducts research on and analysis of the budget and fiscal policy settings on its own initiative.

The bill before the House seeks to make an amendment to the Parliamentary Budget Officer's functions by adding a sixth function. This function will be to audit election costings of all parties within 30 days after a government is formed. Specifically, the PBO will be required to prepare a report before the end of 30 days after the election for each parliamentary party on the costings of publicly announced policies and the impact the total combined cost of those policies would have on the Commonwealth budget. We have already indicated in public that we would support this amendment.

The coalition has nothing to fear from a review of its election costings and, indeed, looks forward to receiving the PBO verification. What is strange is that, even though the coalition indicated its support for this legislation, the government are today moving another set of amendments—so the government are amending their own amendments. This is typical of the chaotic approach of the Labor government to the business of this House. They did not take the time with the original drafting but rushed a half-baked bill into the House in order to score political points. It did not work, and we said it, 'Bring it on,' but now they realise their bill is deficient and needs further work—another example of total ineptitude.

It would be best to discuss the government's amendments together, both the original amendments and the new ones that are flagged to be introduced in the consideration in detail stage, as they flow together and make more sense as a whole unit. It would be best if the government withdrew its original amendments and introduced a new corrected set; however, that is not the way it is being done. As the Parliamentary Secretary to the Treasurer indicates, he is determined to stick to their chaotic approach; so I will restrict my comments on the second reading to the original bill.

The bill confers new information-gathering powers on the PBO. At present the PBO has no legislative powers to require information to be provided to it. All it has is the power to enter into a memorandum of understanding with Commonwealth bodies. These MOUs are just agreements and are non-enforceable. To date the PBO has said these MOUs are largely working well. The information powers within this bill will expand the PBO's functions to require heads of Commonwealth bodies to comply with requests in time to allow information to be taken into account in preparing relevant policy costings. This is unless it is not practicable and lawful, or if it would disclose confidential commercial information or prejudice national security. This requirement applies only during the caretaker period.

The amendments also compel political parties to do certain things. Specifically parties must before 5 pm on the day before polling day in an election give the PBO a list in writing of the policies the party has publicly announced it intends to implement after the election. This compulsion is unusual. Up until now the PBO legislation has not mandated that any party should provide information to the PBO. It has been a voluntary arrangement struck under these agreements. Although these new provisions entail compulsion, we note that there are no penalties for noncompliance, so the provisions cannot be said to be onerous. There is no definition as to which person will be responsible for ensuring the parties' commitments are met, but presumably the ultimate responsibility lies with the leader of each parliamentary party. I note that the PBO is not required to take account of any comments provided by parliamentary parties. However, the post-election report must set out comments provided and note if no comments were provided.

Finally, I note each parliamentary party will be provided with a copy of the PBO post-election report at least 48 hours before its public release. That would allow the parties the time to properly consider the report and, if necessary, prepare a response. That is appropriate. It will prevent parties being ambushed. Parties will be able to submit comments to the PBO on this report. The PBO may either include those comments in the report or revise the report to take account of the comments. These arrangements are an improvement on the post-election audit that the coalition was subjected to after the 2010 election. At the time there was no opportunity for discussion of assumptions or parameters with Treasury or finance. There was little opportunity to discuss the report before its release. Having the opportunity to provide comments is a big step forward. Receiving the report 48 hours prior to its release is also a significant improvement.

Another new provision of this bill is that the PBO can request information for the purposes of preparing policy costings from an authorised member of the party or from any other person the PBO believes has been associated with the preparation of the policy costings. Anyone—a member of parliament, a member of their staff or third parties involved in the compilation of election policies—can be approached by the PBO for information. There is no compulsion. This provision is intended to provide the PBO with the capacity to obtain information to clarify a policy for costing. We would envisage that the information necessary for the costing of coalition policies would be provided by designated individuals, and that the PBO would not need to go to third parties. Nevertheless, the coalition will have no secrets and is supportive of full transparency in the provision of information.

Finally, the bill before the House also allows for the Australian Taxation Office to provide the Parliamentary Budget Officer with otherwise protected taxpayer information, so that he or she can properly perform or exercise his or her statutory functions or powers under the Parliamentary Service Act 1999. I note that the Parliamentary Budget Officer discussed the need for this legislative change in additional estimates held back in February. The coalition views this as a sensible initiative and is supportive of this change.

In summary, the coalition welcomes these amendments to the operation of the Parliamentary Budget Office. They apply equally to all parties. They will ensure that all parties are honest in their policy commitments and that all policies are fully and accurately costed. The coalition will support these amendments. However, to understand and appreciate this bill requires consideration of the new amendments the government will introduce in the consideration in detail. I cannot help but make the point that it would have been highly preferable if the government had got its act together up-front and produced a full and well considered set of amendments for proper consideration and debate by this House. Amending your own amendments is not the proper way to run a legislative agenda. Nevertheless, as indicated, the coalition will support the passage of the bill.

Now for the amendments. The government is moving substantive amendments, as I said, to its amendments to this PBO legislation. The scope of the policies on which the PBO is to prepare its post-election report is being broadened. The original amendment required this report to be prepared on 'publicly announced policies'. This is being changed to 'election commitments'. The definition of 'election commitments' is:

A policy that a Parliamentary party has publicly announced it intends to seek to have implemented after the election.

It sounds broadly the same, but there is a twist. In preparing its list of election policies, the PBO does not have to limit its analysis to policies that are provided by the party to the PBO. It can also include any public announcements made by the party before or during the caretaker period.

The final list of policies to be costed is being left to 'the best professional judgement of the PBO'. This provision is designed to account for promises that are designed to win votes but are then not costed or presented in the official policy documents. The coalition will not do that. If we make a promise, it will be a commitment. It will be included in our policy documents and fully costed.

The new amendments also introduce another element of compulsion on parliamentary parties, in that within three days of receiving a list of policies to be costed from the PBO the party must provide comments on that list to the PBO. The PBO is not required to take account of these comments. The coalition welcomes this additional requirement to comment. It means there will be full interaction with the PBO at every stage of the costing process. The coalition will submit its fully costed set of policies to the PBO. The coalition will comment on the list of policies sent back by the PBO before it prepares its final report. And the coalition will comment on the PBO's final report before publication. As indicated on behalf of the shadow Treasurer, the coalition will support these amendments. However, as the shadow Treasurer said in his second reading comments, it would have been preferable for the government to have gotten these amendments correct in the first place, rather than having to come back to the floor and amend its own amendments. This is a point I have reiterated again today.

Andrew Leigh (Fraser, Australian Labor Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Although this is a topic that I feel very strongly about, there is a large number of bills before the House so I will speak briefly today. The Parliamentary Budget Office was established on the recommendation of a joint select committee of parliament including support from all parties. The aim of the PBO is to ensure that elections are fought around values, so that there are two well-costed sets of policies which face the Australian people. The alternative to the Parliamentary Budget Office is what we saw in the 2010 election where the coalition avoided the Charter of Budget Honesty, a charter set up by Peter Costello, and then went to the election offering policies which instead had been so-called 'audited' by a private accounting firm. That accounting firm was later fined for professional misconduct because they had not conducted an audit. We had the farce of the member for North Sydney claiming that they had conducted only a small 'a' audit. Unfortunately, audit only has a small 'a'. The coalition were, needless to say, embarrassed by this, embarrassed by the $11 billion hole in their costings which Treasury exposed. We saw some deeply disappointing scenes in here when members of the opposition criticised former Treasury secretary Ken Henry for doing his job and simply scrutinising coalition costings.

But what the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2013 will do is now place the role of a post-election audit in the hands of the Parliamentary Budget Office. So even if a party does what the coalition did at the last election and fails to put forward policies under the Charter of Budget Honesty, the Parliamentary Budget Office will still go ahead after the election and assess their costings. It will use its best professional judgement and it will draw on data provided by agencies including the Australian Taxation Office. That is an important reassurance to the Australian people, that if a party attempts to circumvent the Charter of Budget Honesty they will be caught in the noose of the Parliamentary Budget Office's post-election audit. It is a guarantee to the Australian people that they should have costed policies put in front of them. But the Australian people are not yet seeing that from the opposition. The opposition have, on their own admission, a $70 billion gap. That is not my number. That is a number which was first put forward by the member for North Sydney on the Sunrise program on 12 August 2011, when he said:

Therefore finding $50, 60 or 70 billion is about identifying waste and identifying areas where you do not need to proceed with programs.

On Meet the Press the member for Goldstein said:

We came out with the figure, right?

That was on 4 September 2011, and on ABC's AM, on 12 August 2011, the member for Goldstein said, 'It's a case of simple arithmetic.' They did regret it a little later, with the member for North Sydney saying on 8 February 2012, 'Okay, I shouldn't have said any figure because it was part of a debate and now it has been taken as a statement of fact.' But the cat at that stage was well and truly out of the bag.

We have that significant costings hole on the coalition side and the coalition now suggesting to the Australian people that they will do the mathematically impossible, that they will manage to cut taxes, raise spending and pay down debt faster than Labor. At the same time as promising the mathematically impossible, the coalition are repeatedly attempting to avoid scrutiny. They are saying to the Australian people that they will not produce their policies until PEFO, the Pre-Election Economic and Fiscal Outlook. Unfortunately, Treasury secretary Martin Parkinson directly rejected the allegation of the opposition that budget numbers cannot be a basis for costings. Treasury secretary Parkinson said, on 21 May 2013:

I can say on behalf of David Tune, the secretary of the department of finance, and myself—and get this right—were PEFO to have been released on the 14th of May it would have contained the numbers that were in the budget.

As Senator Wong has said, the numbers are the numbers. The figures in the budget are not figures which have a partisan hue to them. They are the figures that are the best estimates of Treasury as to the state of the nation's finances. Based on those figures, the Australian people are entitled to hear what the opposition would do in order to close that $50 billion, $60 billion or $70 billion hole.

The member for North Sydney has said:

I would have expected Martin Parkinson to say nothing different yesterday because he is—quite appropriately—a servant of the Government.

That is a slur on a professional public servant who upholds the best of frank and fearless advice; not the kind of flaccid and fearful public servants that the coalition would like to see but a frank and fearless tradition. The member for North Sydney should withdraw the slur on the Secretary to the Treasury, which is in essence arguing that the Treasury secretary is a liar and a law-breaker.

I commend the bill to the House. I commend the hard work of public servants, particularly Treasury officials, and their professionalism in discharging their duty.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I join with my colleagues in supporting the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2013. Like it has done on many occasions, the coalition has come into this House and supported legislation by this government. I think we support 87 per cent of the bills that come before this House, so it perplexes me somewhat how often I hear in the media of the negativity of the coalition, when the facts speak for themselves on how we have worked. The bill before us today speaks of the development of the PBO, the Parliamentary Budget Officer. This is a well-overdue—and agreed by the coalition—position helping to understand costings, because, by jingo, it can be difficult at that time of the year trying to forecast what revenues could look like. I am going to get to some absolute crackers of revenue forecasts and some expenditure that hopefully in future the PBO will be able to enlighten me about.

One of the other things that the PBO will do is start us all from the same assumption points. Suppose I were to make an assumption in an expenditure over the forward estimates and I were to use an assumption from an economic perspective. Just say I was in the mining sector and I was going to use the long-term average of sales. The flow-on assumptions over the forward estimates, if I were to use a different set of assumptions—say over the short-term average—would be vastly different. There would be billions and billions of dollars difference over the forward estimates. One of the benefits that this bill gives us is being able to compare apples and oranges. There are actually five parts to this bill, and it introduces a sixth, which I will get to.

It came about from the Joint Select Committee on the Parliamentary Budget Office, out of the parliamentary process, which subsequently recommended that the PBO be established. I touched on the assumptions. The PBO prepares costings on request by parliamentarians outside the caretaker period, and it prepares policy costings on request by authorised members of the parliamentary parties. It can prepare responses to parliamentarians' requests relating to the budget, and it prepares submissions to inquiries of parliamentary committees at the request of committees. It can conduct research and analysis on budget and fiscal policy settings of its own initiative.

During the course of an election campaign, parties on both sides will make commitments to what they want to fund. Some of those will be funded internally. Just say you had a rogue person in your ranks who went out and promised something collectively in their electorate that was not part of the party's funding mechanism, the PBO would be able to bring that in in the evaluation process and say, 'Hey, you've got too many dollars being spent twice here'—and money being spent twice is often the case.

The amendments to the bill include a period of 48 hours for rebuttal, where you can go back to the PBO about the post-election report, which I will speak on at length. That is a welcome addition, because in the past it seemed like the PBO was just too quick to get to a camera to highlight inefficiencies, as opposed to doing the job that it is supposed to do.

One of the outcomes I think we are trying to achieve here is to see who gets the 'pants on fire' award when it comes to budget costings!

An unknown member interjecting—

You know about that one! The PBO will be required to prepare a report before the end of 30 days after the election for each parliamentary party on the costings of publicly announced policies and the impact the total combined costs of those policies would have on the Commonwealth budget. So you will put your costings in and 30 days later you will have the outcome of the PBO's decisions. There do not seem to be any real consequences for or negative impact on a party if they do it wrong, because—guess what—the election will already be over. That is probably an area that we could look at bringing forward to give people a little bit more information.

With regard to the amendments, this bill keeps on morphing. It morphs. There seem to be a million amendments to the government's original amendments to the legislation. The coalition indicated its support for the legislation before us today.

Up to now, the PBO legislation has not mandated that any of the parties provide information to the PBO; it has been a voluntary arrangement struck under agreements. Although these new provisions entail compulsion, there are no penalties, as I said. This amendment bill really focuses on honesty and the Charter of Budget Honesty. The PBO is not required to take account of any comments provided by parliamentary parties. However, the post-election report must set out comments provided and note if no comments were provided. That is just a summary of what I said before.

These arrangements are an improvement on the post-election 'audit' that the coalition was subjected to after the 2010 election. As a result, we do welcome the bill. The PBO is something that we can work with. We support it in its entirety. We will continue to monitor the effectiveness of this. We trust that the intent of the bill is sound, and therefore it has our support, along with the many other bills that come before this House that have our support.

Bernie Ripoll (Oxley, Australian Labor Party, Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

Firstly, I would like to thank very much all those members who have contributed to this debate. It is pleasing that there has been so much interest in this Parliamentary Service Amendment (Parliamentary Budget Officer) Bill. Fiscal transparency from all political parties is an essential component of Australia's budgetary framework, and the public must be able to see what political parties stand for and what their policies cost. Political parties need to be accountable for their promises and should not be able to make a series of uncosted assurances that never get subjected to rigorous independent scrutiny. Such scrutiny is exactly what this bill will achieve. The PBO's post-election report will become an important and enduring reference document for the costs of political party promises. If parties try to evade the official costing options available to them during elections, it will all come home to roost in the post-election report.

I again thank all members who contributed to this debate and I acknowledge that the opposition will be supporting this bill and these amendments. The bill positions the PBO as a non-partisan and objective assessor of the fiscal responsibility of political parties at election time. It is an important role, not a role given lightly, and it is a measure of the confidence and trust that the PBO has established with the parliament in a relatively short time. Ultimately, it is up to the public to decide the government it wants and the policies it prefers; but, to make those important choices, the public needs good information.

With the establishment of the PBO last year, parties were given another option to have their election commitments costed outside of using Treasury and Finance. So there are no excuses for any party to get to the election without a fully costed and transparent policy platform. However, regrettably not all parties may want to embrace fiscal transparency during an election campaign and could seek to avoid scrutiny. The PBO's post-election report will expose those parties and impose discipline on the promises made in the lead-up to elections. I will shortly be moving amendments to shore up these processes, to protect against political avoidance of this exposure. The post-election report will ensure that our public debate is informed by properly costed and properly funded policies and that our focus is on the policies that will make Australia stronger, smarter and fairer. A better informed public is a better democracy. I commend this bill to the House.

Question agreed to.

Bill read a second time.