Guy Barnett (Tasmania, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

I rise today to introduce into the parliament a Bill for an Act to establish a Parliamentary Budget Office (PBO) and for related purposes.

The need for the PBO arises from the reckless and wasteful spending we have seen and continue to see from the Rudd Labor Government.  Labor’s debt and deficits, questionable budget accounting assumptions, and billions of dollars in Government financial waste demonstrate the need for independent scrutiny.  Labor has wasted billions of dollars under the Building the Education Revolution (BER) and Home Insulation Programs alone, to the shock and dismay of many hard working Australians. 

For this reason the Coalition is introducing a package of two initiatives, including this Bill to establish the PBO and also a bill to strengthen the requirement for value for money to be achieved in the spending of Government funds.  These initiatives were announced by the Leader of the Opposition, The Hon Tony Abbott MP in Canberra on 22 June, 2010.

The object of the Parliamentary Budget Office Act 2010 (the ‘Act’) is to establish an independent statutory office of Parliamentary Budget Officer to enhance transparency and accountability by providing objective and impartial advice and analysis on the Commonwealth budget and budget cycle, including the financial and economic impact of major policy announcements.

The establishment of a PBO will improve the quality of government spending. Greater scrutiny and transparency of Commonwealth Budgets will deliver better fiscal outcomes and will be an impediment to future Labor governments engaging in further reckless spending.

The method of appointing the Parliamentary Budget Officer is a unique feature of the bill and breaks new ground in terms of independence.  A committee of senior government officials will make recommendations to the Presiding Officers of the parliament and their Deputies who will in turn make the final appointment, for an initial term of 5 years which can be renewed or extended.  The panel of senior government officials will include at least 3 of the following: the Ombudsman, the Auditor-General, the Governor of the Reserve Bank of Australia and the Secretary of the Treasury.

The Parliamentary Budget Officer would then have security of tenure for that period to further ensure the independence of the office.

The Parliamentary Budget Officer is accountable to the Parliament, not the Executive, and will put the legislature on a more equal footing with the Executive with regard to budget information and analysis.  A Parliamentary Budget Office will serve both the majority and the minority and may, by resolution of the Parliament, be asked to report to a nominated parliamentary committee or committees.  It is envisaged that the PBO may be asked to appear before one committee of the Senate and one committee of the house.

The Parliamentary Budget Office will operate under an Operational Plan submitted to the Parliament and updated on a rolling basis.   The Operational Plan will deal with a range of matters relating to the activities of the PBO including establishment, staffing, resourcing, frequency of reporting, scope of activities and related matters.  The first Operational Plan will apply until 30 June 2013, followed by successive 3 year plans.

The Office will have a small, but highly trained staff, whose calibre will reflect the Office’s status as an independent body. It would also have the capacity to engage external service providers.  The PBO will negotiate staffing and resources with the Minister for Finance as do other independent Government bodies within the Australian system, such as the Audit Office or the Commonwealth Ombudsman.  It is expected that the PBO would have a budget in the order of $2 million in its first year (2010/11) for the purposes of establishing the office.

The Parliamentary Budget Officer will also be given significant flexibility to act as he or she sees fit.  The PBO may inform him/herself on any matter and in any way, may consult with anyone he or she thinks fit, may receive written or oral information or submissions, may establish working groups and task forces and may request information from government departments and agencies.

The Coalition’s intention to establish an independent Parliamentary Budget Office was originally announced by former Leader of the Opposition, The Hon Malcolm Turnbull MP in his budget reply of 2009, and I had commenced work on this initiative in the lead up to that address.  Our initiative to also address value for money in public spending was later added to this, leading up to Mr Abbott’s announcements on June 22.  In establishing this body, the Coalition is moving with a growing trend around the world to increase independent oversight of public finances.  The Congressional Budget Office established in the United States in 1975, the Office of Budget Responsibility currently being established in the United Kingdom and the Parliamentary Budget Office established in Canada are notable examples.  Having worked in Washington, D.C.  myself, I have seen the Congressional Budget Office in operation, and am convinced that such a concept, albeit on a smaller scale, is an important step forward in this country.

As an independent officer of the parliament, properly resourced and with appropriate flexibility, the Parliamentary Budget Officer will contribute greatly to a better-informed debate about fiscal policy and the consequences of government decision making, and will therefore help to deliver better outcomes. It is the Coalition’s belief that this initiative will, over time, improve the quality of Government spending regardless of who holds the reins of power, thus ensuring that all Australians get better value for money and restoring public confidence in the budget and budget process.

No future government will be able to spend taxpayers’ money without greater fiscal and legal scrutiny.  Governments will not always like additional scrutiny and accountability, but given the reckless, wasteful and irresponsible spending of the Rudd Labor Government over the past two and a half years, the Coalition believes this initiative is timely and urgently needed.

I commend the Bill to the Senate.

I seek leave to continue my remarks later.

Leave granted.