Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

It has been an afternoon for quotations. I think the government, including their partners, the Greens, should very much keep in mind the adage, 'As ye sow, so shall ye reap.' The Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011 produces a very pale imitation of the commitment made by the coalition—the coalition of the Liberal and National parties, I might point out—during the election campaign to establish an independent, and fearless therefore, Parliamentary Budget Office. In fact, the legislation was introduced by the shadow Treasurer, Mr Joe Hockey, into the House of Representatives on 22 August. Soon after, on 24 August, we had the government bringing in its own pathetic attempt at a bill to establish a Parliamentary Budget Office.

There is nothing at all independent or useful about the organisation that the government is going to set up. For a start, it will be within Treasury, basically, and it will do the bidding of Treasury—or whoever the government chooses to ask it to do it for. It will immediately release information on costings it has been asked to do and it will release those costings as soon as they are done. I am very concerned at the cynicism of this apparent exercise by the government in this area, because what body, what group within this parliament, is going to give the government their figures and the costings without an opportunity to review them themselves?

As the shadow Treasurer, Mr Hockey, pointed out, there was an example at the last election, where costings were done by Treasury on some of our policies that suggested that there would be a shortfall. After the election, Treasury agreed with Mr Hockey and Mr Robb that the interest rate we had chosen to use was the correct one. Of course, the damage had already been done. The government had run around, based on the incorrect assumptions used by Treasury, to claim that there was a black hole in our election costings.

The purpose of having a Parliamentary Budget Office is to give every person in the Senate and every member of the House of Representatives the opportunity to get sensible and independent economic advice and costings on policy ideas. This will not happen if these figures are not able to be kept private whilst people work through what may be wrong assumptions or matters that they did not take into consideration when they first raised the policy idea. There must be a confidential service for costing policy proposals for all MPs and senators—the opposition, minor parties, Independents and even government backbenchers if they have the courage to put forward policy ideas that differ from those of their party. It must be a crucial and non-negotiable element of the legislation that this confidentiality is available. It will be absolutely pointless and useless to have a Parliamentary Budget Office that does not include the prospect of confidentiality. Senator Cormann will shortly be moving amendments to seek to ensure that this is what happens. We will not be submitting our policy costings to either Treasury or a Parliamentary Budget Office prior to an election if we do not have the opportunity to talk to the body doing the costing about assumptions that underlie the costings or even perhaps—though highly unlikely—errors made in costing the policies in the first place.

The Charter of Budget Honesty was actually brought in by the Howard coalition government. Its primary task was to ensure that a government could not mislead the public prior to an election about the state of the fiscal position. It was put in place because of the misleading and disastrous position that the Howard government discovered when the Keating government went out of power in 1996. The Labor Party has really never used the facility at all—not in opposition, not in government. In 2007 and in 2010 they released their full policy costings the day before the election—with the intended idea that this could not be challenged in any sensible way. There were shortcomings with the Charter of Budget Honesty, and one of those was that the service was not confidential; hence our promise at the last election, our commitment at the last election, to have a confidential costing service available to any member of this place who wants to develop policy and find out what the fiscal effects of that policy would be. Under the government's scheme, members of parliament would have no control over the timing of release of policies. They would not have the prerogative to decide to change their policy or amend their policy if the costing turned out to be substantially different from what was expected. So why on earth would they bother?

The point of a Parliamentary Budget Office is to improve governance and policy-making in this place. The only way that that can happen is if members of the opposition and members of minority parties have the same access to information that Treasury and Finance do, but they do not because this bill is designed to ensure they do not. The Parliamentary Budget Officer will have no right to seek information, in fact from anywhere; no right to ask people to appear before him or to pass on information. You cannot arrive at accurate and agreed costings unless there is the opportunity to test those costings with people who understand what is happening in the field. The idea of a Parliamentary Budget Office as we set it out was to level the playing field so that not just the government has the ability to access Treasury and Finance figures but there is the opportunity for everyone to access proper information.

This is a very important change, if it is done properly, to assist in good government of this country. It means that the opposition, the alternative government, would have the opportunity to properly test its policies against the figures that are available but not given to anyone by the government. We have so many examples where the government have chosen to keep secret parts of the modelling—we need only to go back to the carbon tax—they have used. There is no opportunity other than the work—the very good work—done by many stakeholder organisations to disprove the government's figures. The government might like it that way now but they need to remember that they will be in opposition very soon and that a system with probity and that is independent would help. It is quite interesting to note that Senator Sherry in 1997 said:

Costings of opposition policy can only be undertaken at the discretion of the Prime Minister. This is unbalanced and clearly advantages the incumbent government. Only costings of previously announced policies is allowed—that is, policy decisions would have to be made on the basis of incomplete information and be announced.

The paragon of all things good governance, the Leader of the Australian Greens, Senator Bob Brown, said he would be moving amendments so that:

… all participants in elections can avail themselves of having their policies vetted. I think it should be expanded beyond Labor, Liberal and Democrats to all players …

These people are right: that is how it should be. It should provide objective and impartial advice and it should be able to do so in a confidential manner for the person or the party seeking the information. It is very, very short-sighted of this government and their coalition friends the Greens not to accept the amendments that we will be proposing to this bill.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I rise to conclude the second reading debate on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011 and, in doing so, want to make this comment: it has been interesting to watch—intermittently; I agree I have not been glued to the television set for the entirety of the debate—the opposition try to justify their position. We had some extraordinary contributions. I have to say that Senator Joyce's was one of the oddest. There was discussion of Monty Python and hermaphrodites. I am not quite sure what that has—

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I am sure you enjoyed his contribution. You were glued to the television.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

'Enjoy' is not the word I would have used, Senator Cormann. I think sometimes it would be useful if he recalled the fact that he is in the federal parliament and spoke accordingly.

My broader point is this: the opposition have not been able to justify the position that they are now putting, and nor have they tried. They have not tried to justify the fact that they signed up to this report—

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

The fact that yours is useless?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

No, the fact that they, Senator Boyce—your representatives—signed up to the report, which is faithfully reflected in the bill, and you are now changing your position.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

We are not changing our position. This has been our position for a very long time.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Did you not read, Senator Cormann—

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

This has been the opposition's position for a very long time.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

It is interesting, Senator Cormann: I think I listened to Senator Boyce in silence but you cannot help yourself, can you?

We on this side happen to believe that the establishment of a Parliamentary Budget Office is very significant and very important, and there was a time when the opposition thought so too. Mr Pyne and Senator Joyce signed up to the report, signed up to the recommendation, and said, 'Yes, we're in.' Now what are they doing? They are crab-walking away from their commitment.

The legislation before the chamber is important legislation. It is a permanent reform. It will build on Australia's already very strong fiscal frameworks. It will ensure greater accountability and transparency in policy-making. It will promote greater understanding in the community about fiscal policy and, importantly and relevantly, it will ensure that the Australian public are kept better informed about the fiscal impact of policy proposals, particularly during the election period.

These reforms will allow all parliamentary parties and Independent members to have their policy costed by the PBO. Confidential policy costings are possible. The opposition keep suggesting they are not possible. They are. Not in a caretaker period but outside the caretaker period of a general election, members and senators will be able to request confidential policy costings. They will be able to test policies, they will be able to amend policies, they will be able to rework them, they will be able to develop different options—all of these things will be available to the opposition, all costed confidentially by the PBO outside the election period. But Mr Hockey is either too lazy or too incompetent to understand that and so now has a fig leaf around no confidentiality and the need for transparency during the caretaker period, a position advocated by Mr Peter Costello—they are Peter Costello's caretaker conventions of the Charter of Budget Honesty. Now Mr Hockey is saying, 'Oh no, we do not want that.' Inconvenient, this budget honesty thing, is it not? It is inconvenient, this budget transparency thing—inconvenient to actually have to front up to the Australian people and tell them what your policies cost.

During general elections, as I have said, the election policy costing service will be fully transparent, with costings made available to the public. This is exactly as proposed by Peter Costello when he introduced the Charter of Budget Honesty Act in 1998. I note that there are no interjections now.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

What did you do in 2007?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

At the time Peter Costello introduced the Charter of Budget Honesty Act, he said:

By requiring the costings to be made publicly available, there is limited scope for the results of the costings to be misrepresented.

This is what the opposition wants to walk away from. It is a transparency requirement which is fundamental to ensuring that Australian voters are informed about the fiscal impact of election policies before they cast their vote. The Parliamentary Budget Office will help to ensure that the Australian people will not again be subjected, as they were at the last election, to a veritable avalanche of fiscal lies. We know that the opposition had an $11 billion black hole in their election costings. We know that and nothing they say can hide that. That is what occurred in the last election campaign. What we know is that the opposition spent that campaign trying to avoid public scrutiny of their election policy costings under the Charter of Budget Honesty.

Now they are creating excuses to hide from public scrutiny, walking away from the very model they signed up to earlier this year. The bill will provide the opposition with an advantage no other opposition has ever had. No other opposition has ever had the sorts of advantages which are provided for in the bill before the chamber. The opposition would have access to a confidential costing service outside of a general election period—never provided before—and a fully transparent costing service during a general election. The opposition will have two options when it comes to costings. They will be able to elect to have Treasury and Finance cost their election policies or they will be able to elect to have the PBO do it, but they will have no excuse. They will not again be able to hide their policy costings from public scrutiny.

As I said earlier, a very important fact is this: the government's bill is based on the model recommended by the Joint Select Committee on the Parliamentary Budget Office. Every single member of that committee supported the model the government is now putting forward. The Liberal Party signed up to the model in March this year. There was broad Parliamentary representation on the committee. It included members of the Liberal Party, the National Party, the Labor Party and the Australian Greens and an Independent member of parliament. It included two shadow ministers—Senator Joyce and Mr Christopher Pyne as deputy chair. This is how good the member for Sturt's word is. He is now walking away from a report he signed up to because it is inconvenient. We on this side welcomed the bipartisan support for this proposal—the bipartisan inquiry, the bipartisan recommendations. That is why it is so deeply disappointing to see the opposition come in here and walk away from the model which was recommended by the joint select committee and supported by the opposition.

The fact that the opposition are now walking away from what they signed up to can only be understood in one way—a continued intention to deceive the Australian people about the cost of their policies. That is the only explanation for their position, that they no longer want to support a Parliamentary Budget Office and that they no longer wish to support the Charter of Budget Honesty proposition. It is a very clear indication that the Liberal Party want, yet again, to keep the Australian people in the dark at the next election when it comes to policy costings, just as they sought to at the last election.

It is very instructive to consider what occurred after the last federal election, which, as we all know, was a very close election, in the process of discussions between Mr Abbott and the Independents and between the Prime Minister and the Independents. We owe a debt to the crossbenchers in the lower house because they ensured that the holes in the opposition's costings were made transparent to the Australian people. What we have to ensure, in the interests of democracy, is that that cannot occur again. You cannot rely on a hung parliament and a process of analysing costings being required by Independents to help them determine whom they are going to support to form government to disclose the sorts of errors—deliberate or otherwise, who knows?—contained in the election costings of the opposition.

This is particularly relevant at this time for two reasons. One is that we know from Mr Robb that the opposition have to make some $70 billion worth of cuts just to get to the starting line. I have said before in this place that we know that the largest parts of the budget are defence, social security, health and education. If you are going to cut $70 billion out of the federal budget, you have to take a substantial slab out of those areas; otherwise you are not going to be able to do it. I think the Australian people deserve to know where that money is coming from. I think the Australian people deserve to know that.

If the opposition were as good as they say they are, they would not be scared of putting up their policy costings and they would not be scared about telling Australians which part of Medicare, which part of public hospital funding, which part of defence, which part of the social security system or which part of education they are going to cut. These are the people who say, 'We are such great economic managers; we are going to make our numbers add up.' If you are so sure of it, why are you opposed to a Parliamentary Budget Office which is going to help you do that, which you signed up to and which will enable you to put your costings transparently to the Australian people? There is only one answer to that and that is that you do not want to tell people, you do not want the costings public and you do not want to be transparent—despite all your words.

The second reason it is important, apart from those more electoral and political aspects of the fiscals, is the broader economic environment. Given the uncertainty in Europe and given the importance of responsible fiscal policy, it is incumbent upon parties of government to demonstrate their fiscal positions, their budget positions and how they are going to pay for things. Again, I do not think the opposition wants to do that. We have seen that in the last fortnight. I do feel somewhat sorry for Senator Cormann. We have all been in internal discussions at different times in our political lives on the losing side of an argument. He was very publicly on the losing side of an argument which involved Mr Abbott deciding to spend money he does not have. I do say to Senator Cormann that, if he is serious about showing himself to be a responsible economic spokesperson, he really ought to do away with this pretence that his opposition to this bill is based on anything other than very base political motives. There is no principle in this; it is simply that the opposition do not want to be held to account on their policy costings.

I have circulated a letter—I trust Senator Abetz has passed it on to Senator Cormann—to the opposition, to Senator Joyce, Senator Bob Brown and Senators Madigan and Xenophon. The letter has attached to it a minute from the secretaries to Treasury and Finance and Deregulation which outlines the difficulties associated with what is being proposed by Senator Cormann. While we do not have substantial time for the committee debate, I am happy to address it in part during the committee debate. I will briefly touch on it here. The secretaries' advice is very clear as to the problems associated with amending the bill to allow the PBO to provide confidential costings during the caretaker period. The secretaries' advice makes the very clear point that the proposal is inconsistent with the Charter of Budget Honesty. It is also inconsistent with constraints associated with the caretaker conventions. The secretaries make the point also that such an amendment will create an environment which enables game playing and the secretaries also make reference to the resource implications of the increased workload which would arise.

The first two, for the purposes of this discussion, are probably the most relevant and most important in terms of the opposition's response. The opposition should consider very carefully the advice of these apolitical officers in the Public Service who are very senior officials heading Treasury and finance when they speak about the way in which the opposition's proposals are inconsistent with the Charter of Budget Honesty. The opposition, in continuing in the face of this advice and in the face of the propositions which have been put to them, are really walking away for their own political purposes from the framework Mr Costello set up when he was Treasurer, a framework set up by a man whom the opposition continue to point to as being such a great Treasurer and continue to point to as their bastion of fiscal and economic responsibility. He is their hero.

People in this chamber have lauded Mr Costello up hill and down dale for many years, but they cannot answer the basic question of why they are walking away from the framework he put in place. The only reason they are walking away is that they do not want to have to front up to the Australian people and disclose what their policies cost. It is demonstrated that this particular economic team of the opposition has been unable to get their costings right. We have had the $11 billion black hole. We have had the compete stuff-up in the floods costings and now we have continued spending promises being made by the opposition which are not funded.

The only thing they can do in response to that is not to do the hard yards; it is to engage in the same sort of dishonesty which we saw at the last election where the opposition failed to tell Australian people the truth about what their policies would cost. That is manifesting in the context of this debate with their opposition to a Parliamentary Budget Office which they previously supported. In March of this year, they signed up to a model of the Parliamentary Budget Office which was endorsed by members of their own frontbench, including the Leader of the National Party in the Senate. They are now walking away from it and they have not proffered any reason to this chamber nor of the Australian people as to why they are doing so. I say the only reason they are doing it is that they do not trust themselves to do what this economic team has not yet done, which is to get their costings right. So they do not want to be held to account during the election campaign.

I have a view that numbers do matter, particularly in the current economic environment. I do have a view that Australians are entitled to know the choices that politicians make. Budgeting is all about choices. Sometimes those choices are not particularly happy; sometimes they are difficult. Parties are defined by the choices they make and what they prioritise. For example, the Labor Party has prioritised in recent decisions the increase in wages for low-paid workers in the social and community services sector. That is an indication of priorities. I think the opposition should be required to tell the Australian people what their priorities are. Their priorities are demonstrated not by the chest beating, not by the yelling, not by Mr Abbott doing his one-liners, his three-word grabs about taxes and the sky falling in; they are demonstrated by the policies they put to the Australian people, by what they choose to fund and by what they choose to cut in order to fund it. That is the business of government. It is regrettable, in a party that previously cared about this, that there is an economic team, of which Senator Cormann is part, who do not seem to believe that that is part of their job within our democratic tradition, that their job is also to say to the Australian people: 'These are our policies. This is what they will cost. We have made sure those costings are correct. This is how we are going to fund them.' On these key issues, the opposition are found wanting. Their position today in this chamber, on this legislation, is a continued demonstration of the economic and fiscal irresponsibility which, regrettably, has now come to characterise the coalition and the economic team of which Senator Cormann is a part.

Question agreed to.

Bill read a second time.