Lucy Wicks (Robertson, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Joint Committee of Public Accounts and Audit I present Report 482, Review of the operations of the Parliamentary Budget Office 2019-20, together with Executive Minutes on reports Nos 476, 479 and 480. One of the key functions of the Joint Committee of Public Accounts and Audit is to provide oversight of the Parliamentary Budget Office. The committee's report on the review of PBO operations is presented to the parliament under section 64S and 64T of the Parliamentary Service Act 1999. The purpose of the committee's inquiry was to report on possible areas of reform to support the effective operations of the PBO, the PBO's implementation of recommendations of past reviews and stakeholder relationships and engagement. The committee concluded that the PBO is fulfilling its legislative mandate and is held in high regard by stakeholders.

The PBO continues to inform the parliament by providing independent and nonpartisan analysis of the budget cycle, fiscal policy and the financial implications of proposals. At the time of the committee's inquiry and since the start of 2016-17 the JCPAA heard that the PBO has completed more than 6,460 policy costings for parliamentarians with a median response time of 13 days; published more than 25 reports to inform the parliament and the public about fiscal policy and the budget, all of which were reported in major media outlets; published the 2019 post-election report of election commitments, with new features including medium-term costing minutes and searchable online costings; and received formal and informal feedback from parliamentarians, government agencies and other stakeholders that its work is valued and its interactions are professional.

To support the continuing effective operation of the PBO, the committee has recommended that the Parliamentary Service Act 1999 be amended to provide for an automatic referral process for independent review of the PBO after a general election. This significant reform will enable the committee to monitor PBO implementation of review recommendations over the life of the parliament and to serve to further reinforce the independence of the PBO.

During the inquiry, the PBO provided the committee with a comprehensive update on its implementation of the recommendations of past reviews. The committee notes that the PBO has sought to address all of these recommendations and is working to improve further in each of the broad areas identified.

I would like to thank the PBO and other agencies and individuals who participated in this inquiry. I would like to thank the deputy chair and all members of the committee for their cooperation in producing this report. I commend the report to the House.

Report made a parliamentary paper in accordance with standing order 39(e).

Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

I thank the chair for her words, and I commend the report as well and support the recommendations. As was noted, we have a statutory responsibility to decide consciously after each election whether we'll conduct a review of the PBO. This term, it was decided to conduct what I might call a modest review. There was a much more extensive, and expensive, review conducted only last term. I think a review on that sort of scale should be conducted every now and again; every two or three terms you might have a deeper-dive look, because it does cost a lot in both PBO resources and external expertise. So I think this review was fit for purpose.

Overall, it's found the PBO is going well. The recommendations of previous reviews are being implemented. Stakeholder relations are positive—it's really important we have evidence of that. Stakeholders include every member of parliament, in particular members of the opposition and backbench MPs, who are probably the heaviest users, rightly, of the PBO; the Australian Public Service, a critical part that gets the costing inputs; think tanks; and research outfits. I think the recommendation to make a review automatic is appropriate, provided the JCPAA can set the terms of reference and the scope, which is part of the recommendation.

I want to touch on two or three issues that were touched on in the inquiry and mentioned in the report. First was the possibility of an expanded scope of work for the PBO. In particular, it was the idea of having the intergenerational report, which is done every few years by the government, moved from the Treasury to be done by the PBO. It's an interesting idea. It's been around for a while. I think there's a strong case to examine this. The last IGR, frankly, was a joke. It was unfortunately completely politicised by then Treasurer Hockey and was widely discredited, based on ridiculous assumptions that were entirely political. Similarly, that flowed through even to last year's budget, where the surpluses were built on dodgy fertility and migration assumptions. But these are serious questions. Whilst there is a policy case to shift the production of the intergenerational report to the independent Parliamentary Budget Office—and this is the kind of thing that happens in other jurisdictions around the world, with the Congressional Budget Office and others preparing these independent forecasts—currently legislation binds the PBO to using Treasury's assumptions, so, to see such a change, they'd need to develop their own economic forecasting capability.

I think that, at this point, the committee is right—and I say this despite Labor having had a policy at the last two elections to shift the IGR to the PBO—at this time to leave it as it is for now but to see what happens with the next intergenerational report. If, again, it's built on dodgy political assumptions and discredited then I think the case to move this to the independent PBO will be significantly strengthened.

The other point I'd make, the second point, which I've touched on, is around submissions we've received arguing for a greater role for the PBO in gender based budget analysis, in particular to improve the articulation of gender distributional impacts on costings provided to parliamentarians, which we thought was a good idea and made a recommendation. There was also the suggestion that the PBO should be responsible for a women's budget statement. We didn't make a recommendation in support of that. I believe that should be done by the government. It isn't being done by the government, because Tony Abbott stopped it, but I don't believe it's a responsibility of the PBO. It should be done by the government. Of course, there's nothing to stop the PBO doing further gender based analysis on the budget.

The final point I'll make, in relation to costings, which was an interesting discussion and part of the public hearing, is about the suggestion that the postelection report that the PBO has to produce should in some way encompass the commitments or fantasies of minor parties. It was an interesting issue, regarding the possibility of making costings compulsory for minor parties. In particular, it was seen by some members as having merit in that it might deal with the nonsense of people like Clive Palmer and Pauline Hanson producing utterly ridiculous, outrageous policies and putting them on billboards as if they were somehow realistically costed or implementable.

There is the suggestion that perhaps parties of a certain scale or number of members should be forced, as part of the transparency and honesty of costings, to submit their policies for costings. Of course that would be embarrassing at times for the government, given their dodgy little deals with Clive Palmer and Pauline Hanson, but I think, if we could find a way to do it, it would potentially improve public discourse. It has been a great reform that the major parties now submit to costing discipline. In the election it has improved the quality of public policy and debate, so it's an interesting idea to look at this further to see if we could extend that. There are practical difficulties, of course. They'd have to comply in some way.

I thank the chair and the PBO for their cooperation in the inquiry, which had an open-minded approach.