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

The coalition has a strong commitment to the establishment of a Parliamentary Budget Office, but our commitment is to the establishment of a strong and effective Parliamentary Budget Office. In fact, establishing a strong and effective Parliamentary Budget Office was a policy which we took to the last election. The shadow treasurer, Mr Hockey, introduced a private member's bill to establish a Parliamentary Budget Office earlier this year. But there was a big difference between the Parliamentary Budget Office put forward by Mr Hockey on behalf of the coalition and the one we are debating here today. The two bills could not be more different.

The coalition would have established a strong and effective Parliamentary Budget Office. The government's bill before us here today does not. The functions of the Parliamentary Budget Office under the government's bill are severely constrained. For example, the government's Parliamentary Budget Office is not allowed to prepare economic forecasts or prepare budget estimates. Why not? Without this capacity, how does the Parliamentary Budget Office prepare longer-term analysis of the impact of government policies on the budget? This undermines the whole purpose of the Parliamentary Budget Office, which is meant to inform the parliament through analysis of the budget cycle, fiscal policy and the fiscal implications of proposals.

I pause here for a moment because just before we started debating this bill we had a discussion about the government's mining tax proposal. I talk about the costings and the fiscal implications of the mining tax in the way the policy was first announced by the government and what has happened since. We had the original announcement by the government back in May 2010. The Henry tax review had reported in December 2009 but the government sat on the report and released the report in May 2010 at the same time as making an announcement that they would pursue a resource super profits tax. We were told at the time that the resource super profits tax would raise $12 billion in the first two years. In 2012-13 and 2013-14 the revenue would be $12 billion. Then we were told there would be a whole series of promises attached to that mining tax revenue, a whole series of promises that we were told this particular tax would pay for.

We have got to look at this in the context of a government that at the time was desperate to be able to claim and create the illusion of an early surplus, 2012-13. When you look at the detail of the original announcement, most of the more expensive measures attached to the mining tax only started in the second year, 2013-14. So in 2012-13 there was a significant surplus in revenue and then moving forward the cost of the related measures was going to increase. But it was quite cunning and quite sneaky the way it was announced: you had revenue for the last two years of the forward estimates, and most of the costs of the related promises only started in the final year of the 2010-11 budget estimates, which was of course the 2013-14 financial year.

The government listed a whole series of costings, including $240 million for the proposed increase in compulsory super, which would go up in 2013-14 by a quarter of a per cent. That $240 million cost is because higher income earners who pay higher marginal tax will pay less tax when more of their money is forced into superannuation, which is taxed at a lower rate. There is a whole series of other costs that are listed.

To this day the only information from government that we have on the record for all of the measures is for the 2013-14 financial year. It would have been very useful for the parliament to be able to get independent advice from the Parliamentary Budget Office about the implications both on the revenue side and on the costing side at that time. I will try to go through it in sequence. The government, under significant political pressure because of the incompetent way they handled the announcement, because of the incompetent way they put the tax together and because of the incompetent way that the whole thing was played out, they straightaway ducked for cover. They were not prepared to put information out into the public domain, and any information sought by the parliament was denied by the government. The Parliamentary Budget Office would have been able to give independent advice to the parliament as long as it was able to make its own estimates based on proper processes and proper and transparent assumptions. It should have been able to prepare its own economic forecast.

What happened next was that the government negotiated a secret deal—that is, exclusively and in secret—with the three biggest mining companies. It was intriguing because, even though the government made significant concessions to the three big mining companies, the fiscal impact of all those changes was only $1½ billion. All of us who were close to the mining tax development process were quite intrigued. How was it that the RSBT, with a higher rate, a broader base and a whole range of other more stringent features, was only going to raise $1½ billion more than the MRRT? It eventually came out, through investigations by a Senate committee questioning the then Treasury Secretary Ken Henry, that secretly and behind closed doors, without telling anyone, at the time of negotiating the deal the government changed their commodity price assumptions and a series of other assumptions that were informing their mining tax revenue estimates. They did not 'fess up to that. They did not transparently provide that information at the time of announcing the deal; they just wanted to make it look like they had done this deal with hardly any impact on the budget.

Again, it would have been very useful for the parliament to be able to get proper, credible and independent advice from the Parliamentary Budget Office about what was going on at the time, and it would have helped inform the public debate. Mr Swan will always duck for cover. He will always try to hide. He will always try to perpetuate government secrecy whenever he is under pressure because one of his many stuff-ups is at risk of public exposure.

Now we are told that there is $10½ billion worth of revenue from the MRRT because the commodity price assumptions have been changed—based on information provided by whom? By Treasury? No, by the three big mining companies, who were also given the opportunity to design their own tax which just happened to suit their needs and make it harder for the smaller local miners to compete with them. We are told, 'Our revenue estimates for the mining tax were changed and our commodity price assumptions were changed based on data provided to us by the three big mining companies who designed the tax, but you're not allowed to know what the commodity price assumptions are.' This is government secrecy gone mad yet again.

I call on the Greens to seriously reflect on this. We have the circumstance now where we have revenue estimates based on assumptions provided by the three big companies who were given exclusive access to negotiate the design of the tax, and they are the only ones allowed to know what the government's revenue assumptions are. Surely we need a Parliamentary Budget Office that has the strength, the capacity and the capability under the legislation to develop its own estimates that can be put out for scrutiny, to develop its own forecast so that the public can know what is what.

And it gets worse, because there are serious doubts now as to whether the three mining companies that sat around the table with the Prime Minister and the Treasurer to negotiate the deal will pay any tax. One of the features that the government gave them was to be able to effectively deduct costs based on the market value of their assets. The government has given those three big mining companies a big tax shield not available to the smaller miners. We want to have information about these sorts of issues from a strong and effective Parliamentary Budget Office. This government clearly does not want that. This government does not want the Parliamentary Budget Office to interfere with its complete dedication and commitment to keeping things secret and covering things up. That would be a real problem for this government.

Let us look at the costing side. As I mentioned earlier the only costs we have officially and on the record for a full financial year for all the measures are the 2013-14 figures. In relation to some measures, like the proposed increases in compulsory super, it is true that it was mentioned in a footnote in the budget papers that by 2019-20 the cost of an increase in compulsory super to 12 per cent would be $3.6 billion. It is true that since the legislation was introduced that, in relation to that measure, the government has stated in its explanatory memorandum that the cost in 2014-15 is going to be $500 million. But why is the government not prepared to give us the costings for all of the promises they have attached to the mining tax over the current forward estimates? Can somebody explain to me how the government can get away with refusing to provide information to this parliament about costs of promises they are putting through the parliament throughout the current budget forward estimates?

Now that we are in the 2011-12 financial year there is an additional financial year that comes into play, which is 2014-15. What we know based on the information the government have released so far is that in 2013-14 the revenue from the MRRT is expected to be $4 billion. We know, based on the government's own figures in the budget, that the cost of all of the promises that they have attached to the MRRT in 2013-14 will be $6.1 billion, so there is a $2 billion shortfall. We also know that the impact of decisions in Western Australia, South Australia, Tasmania and New South Wales to increase royalties is about $1 billion in 2013-14, so there is already a $3 billion shortfall in 2013-14. We also know that right now we are in a period where we have record terms of trade—the best terms of trade in 140 years—and commodity prices are high. But Treasury expectations are that those commodity prices will come down over time and that revenue from the mining tax will come down over time, but the cost of all of the related measures will continue to increase. So we have got a circumstance here where we have got highly volatile downward-trending revenue from a tax that is linked to a whole series of promises, the cost of which is going to increase and increase. It is a fiscal train wreck in the making.

We have not been able to get the government to even give us the facts and figures as to what their assessment is of what the cost of their promises will be in 2014-15, the final year of the current budget estimates. We have pursued it in Senate estimates—Senator Sherry was quite right. We asked the question and they said: 'We have not got that information. When we costed these promises, we only costed them for 2013-14 because that was the final year of the then budget estimates and we then do not recost it. It goes into the base.' What the Executive Director of the Revenue Group from Treasury said was: 'We do not recost this all the time unless we are specifically asked. It just goes into the overall pot.' This is in relation to measures that have not been approved by the parliament yet and are attached to a tax which has not been approved by the parliament yet. We are asked to make decisions without having the proper information before us.

A proper, strong and effective Parliamentary Budget Office, given the capacity to prepare their own economic forecasts and prepare their own budget estimates around key measures like this, would be able to seriously assist the parliament in making judgments on behalf of the Australian people. At the moment, quite frankly, the government is getting away with this cover-up and secrecy approach because we just keep banging our head against the wall and the government just ignores us. The Senate passed an order for the production of information a couple of weeks ago with a deadline of 8 November to produce the costings over the current forward estimates for all of the promises Labor has attached to the mining tax. The coalition and the Greens voted together to force the government to provide that information. Arrogantly and treating the Senate with complete contempt, the government have not even said: 'Look, we are still working on it. We will give it to you a bit later.' They have just completely ignored it. The deadline ran out on 8 November and the government have just completely ignored it. The reason the government are ignoring these proper requests from the Senate is that they know they can get away with it. This is a very bad precedent. I have got to say that governments of both persuasions, whether it was the Howard government, the Keating government or the Hawke government, complied with these sorts of orders for the production of documents. Every now and then there was a bit of jigging around about scoping it and everything else, but they complied. Here, not only did they not comply, they did not even send in a holding response. How arrogant is that? The point here is that we need a better process to be able to resolve these sorts of deadlocks.

When the Gillard government signed their alliance with the Greens we were told that, 'Whenever there is a deadlock between the parliament and executive government about the release of information, we are going to send it to the Information Commissioner for him to settle these sorts of disputes. The Information Commissioner is going to arbitrate about whether certain information should indeed be released or whether it should not be released.' That has been a complete failure because after the government refused to provide information about their mining tax revenue estimates, commodity price assumptions, production volume assumptions and so on—information that state governments like Western Australia, Queensland and others, who have got revenue that is sensitive to variations in those sorts of variables, publish as a matter of course in their budget papers, but which Treasurer Swan keeps secret because he has got something to hide—the Information Commissioner said he could not do it. That process the Greens and the Labor Party entered into as part of their alliance negotiations is not working. It is not happening. We are now 14 or 15 months down the track and it has not happened. I am saying we need to have a Parliamentary Budget Office which has got teeth and the proper capacity to do these sorts of jobs.

The bill before the Senate also gives limited powers to the Parliamentary Budget Office to gather information. The Parliamentary Budget Office must enter into memorandums of understanding with relevant departments to determine what information they can get and when they can get it. The Parliamentary Budget Office will have to negotiate an arrangement with every single government department and agency from which it requires information. These departments and agencies will not be compelled to make these arrangements. The Parliamentary Budget Office will have no leverage to compel these arrangements to be made. It stands to reason that the arrangements that are finally made will be structured to be in the best interests of the government, government departments and agencies wanting to protect information, not in the best interests of the Parliamentary Budget Office. There is a significant risk that the Parliamentary Budget Office will find itself hobbled in its ability to obtain the information and documents it needs to do its job, the same way we in the Senate continue to be hobbled and constrained in our ability to obtain information and documents and do our job.

The bill before the Senate sets out confidentiality arrangements which will be different for policy costings during the caretaker period compared to other times. No reason has been given for this different treatment. The standard policy costings function will be confidential unless otherwise indicated by the member or senator. In contrast, the function provided during the caretaker period will not be confidential. So requests for costings will be immediately published on the websites of the Treasury and/or the Department of Finance and Deregulation. The result of the costings exercise would also immediately be published on the websites. That is not conducive to good process and it is not of course the way the government itself operates. Non-government parties would not be able to get costings done and then choose when to release a policy. Non-government parties would not be able to change their mind and reassess the merits or otherwise of various options and to release policies following some sensible reconsideration because they will be made public immediately, even though they might not have run their proper course. There is no facility for confidentially testing the costings of a range of policies and then choosing which ones will be policy undertakings for public release, and there is no right of consultation with or review by the department—their view is the final word.

The government's bill is clearly inadequate and flawed and the coalition will propose a series of amendments to address these flaws. The establishment of a Parliamentary Budget Office is an important step in enhancing the quality of fiscal management and policy processes in Australia, but this bill falls well short of what Australia needs.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I support the legislation to establish a Parliamentary Budget Office. Nobody will forget the furore in the 2010 federal election campaign when the coalition refused to have its policies costed by Treasury under the provisions of the Charter of Budget Honesty. Instead, the coalition went to a private firm of accountants-auditors. None of us will forget that, when Treasury did an analysis of those costings after the election, there was a massive black hole. The accountants-auditors, WHK Horwarth, said that when they were provided with the Liberal Party's election policies they checked them based on the assumptions provided. But the assumptions provided were not made public. Of course an accounting firm is going to look at the assumptions provided to check the figures, but if those assumptions are not made public we do not have a level playing field. If you provide ridiculous assumptions, your ridiculous outcomes can be signed off by a firm of auditors.

So there was a major furore in the election campaign. At the time the Greens held a press conference to reiterate our policy, which had been in place for a long time, that we needed a Parliamentary Budget Office that provided to non-government parties of all kinds and Independent members an opportunity to have budget measures costed and an iterative discussion of those measures over time, and at least the community would then have some confidence that, when the government's costings done by Treasury are released and so are the costings of the Liberals, the Nationals, the Greens, the Independents or whoever put out policies during an election campaign, the figures are reasonably based and that there is no duplicity or attempt to con the public through the underlying assumptions. That is why we reiterated that part of our policy platform in the election campaign.

The Senate will recall that after the election, when no one party won government, the Greens signed an agreement to give our parliamentary confidence and supply to the Labor Party and to the Prime Minister, Julia Gillard. In our written agreement with the government, article 4.3 states:

Establishing within 12 months a Parliamentary Budget Office within the Parliamentary Library with the structure, resourcing and protocols being the subject of decision by a special committee of the Parliament which is truly representative of the Parliament.

That was clearly part of the agreement that Prime Minister Gillard signed with the Greens in order to remain Prime Minister, and I am pleased that that undertaking is now being given effect in legislation. It has been part of a process, having been subject to a decision of a special committee of the parliament. It was recognised in the agreement with the government that the process would include every aspect of the parliament—everybody's views.

I reiterate for the purposes of this debate that the Joint Select Committee on the Parliamentary Budget Office had on it representatives from all sides of politics. The chair, Senator John Faulkner, received the thanks of every member serving on the committee for the fair way he chaired the inquiry and for the comprehensive nature of the inquiry. The deputy chair was the Hon. Christopher Pyne, who is the Manager of Opposition Business in the House of Representatives. So the deputy chair was not a novice in parliamentary politics and elections, as we might have thought was the case after listening to the contribution of Senator Cormann. But, no, it was the Manager of Opposition Business. Kelly O'Dwyer MP from the Liberal Party in Victoria was also on the committee, as was Senator Barnaby Joyce from the Nationals. From the Independents there was Mr Robert Oakeshott. I was on the committee representing the Greens, and the Labor Party had not only the chair, Senator John Faulkner, but also Senator Doug Cameron and three members from the lower house—Anna Burke, Nick Champion and Yvette D'ath. We can see that the committee was made up of experienced parliamentarians from across all sides of politics who in many cases had been through not just one but several elections and who understood the process.

The Greens' commitment to a Parliamentary Budget Office particularly concerned making sure policies could be professionally costed and worked through so that the community had the ability to make judgments in an election context. The incredible thing is that the report of that committee, which made a number of recommendations that have now been given effect in the legislation—and I congratulate the Labor government on allocating the funding to not only bring the legislation but give it effect, to have an independent parliamentary budget officer employed and an office set up—was unanimously supported. It is very interesting that Senator Cormann and the rest of the coalition now do not agree with it, because, at the time, there was no dissenting report, there were no additional comments from the coalition. They were happy with the report of the committee at that time.

There is only one reason why the coalition are now running away from supporting what they supported as a result of that process—

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

You're doing the Labor Party's bidding again.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

that is, they are afraid of having their policies costed, going into the next election, because they have a huge budget hole which they will not be able to credibly cover up—

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

You may as well join the Labor Party.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

if they have to have their policies costed. I know Senator Cormann is embarrassed.

Senator Joyce said one interesting thing when he was speaking earlier today; he said the burden of the superannuation changes would fall on small business. That is very interesting, because Senator Cormann has been completely overthrown and humiliated by his own party, which have said that they will take on the superannuation changes. If Senator Joyce is worried about small business bearing the cost, who is to bear the cost under the coalition's plan to take on the nine to 12 per cent superannuation increase? Who is it going to be? That is a question the coalition have refused to answer to this day. If Senator Joyce is so worried about small business then let us hear from him—he will be speaking in just a moment—or from Senator Cormann who is going to pay for the superannuation increase.

I want to run through this black hole that a parliamentary budget office, costing policies, would need to look at. For example, among the promises the Leader of the Opposition has made which will worsen the budget balance, there is: $3.2 billion to fund his so-called Direct Action Plan to pay polluters to reduce emissions; $25 billion lost from not collecting revenue from the large polluters, by getting rid of the emissions trading scheme; $11 billion lost from not collecting revenue from the largely foreign owned mining companies that have been the subject of discussion in recent times; another $1.7 billion lost from not collecting revenue from higher income earners to contribute to rebuilding after the Queensland floods; and $37 billion to fund the election commitments they have made to date. That all comes to at least $70 billion over the forward estimates, and now you have to add on to that the superannuation backflip. So it is no wonder that the coalition do not want a parliamentary budget office now. Even though they say they do, is it any wonder they do not? The reason they do not is that they want to continue to go to a private firm of auditors or accountants to provide assumptions which are never made public so they can come out with a whole lot of nonsense in terms of policies.

The point here is that a parliamentary budget office gives the community some degree of confidence that they can compare the promises made in election campaigns to what happens after elections, and about where that money is going to come from.

We have a situation here where the coalition have said that they want to go for small government. They want to get rid of 12,000 public servants, but that will have to increase if they are going to make up $70 billion in budget costs—not to mention, as I said, the $70-plus billion because of the additional superannuation that has to be funded. They are going to cut that level of public servants, but their Direct Action Plan will require a whole bureaucracy to operate it. That will be the 12,000 plus or minus however many they get to manage that bureaucracy that they have said they want to establish.

That is the context of this discussion. We have a coalition that is afraid to front up to a parliamentary budget office with its election policies to have them costed. One of the issues that they have on the table is confidentiality. This was thrashed out at length, as Senator Joyce would know, in the committee process, and it was agreed that, given the resourcing levels of the Parliamentary Budget Office, once an election was called it would be impossible for the office to be able to conduct the iterative negotiations that are necessary to cost policies. That is why it was unanimously agreed—everyone on that committee agreed—that in the years leading up to an election is when policies can go in, and discussions can be held, and remain confidential. But, once an election is called, if you put those policies in as a package, they will be made public.

That is consistent with the Charter of Budget Honesty. This is not a new idea. This was discussed at length in terms of fairness, levels of resourcing for a parliamentary budget office and consistency with the Charter of Budget Honesty, and it was agreed that we would see how this operated in the context of the next election. And, as with all of these kinds of structures, there will be reviews into the future after that experience.

Today, Senator Joyce has been swept aside by the coalition's absolute desperation to avoid the scrutiny of either Treasury or the Parliamentary Budget Office, because the options on the table, which have been put very clearly, are that, if you are a registered political party in the parliament, you put forward your election costings to either Treasury or the Parliamentary Budget Office. One of the important reasons for the Parliamentary Budget Office is that those costings that you get done between elections remain confidential. If you have to put them to Treasury then they do not remain confidential, and you run the risk in that circumstance of the government anticipating what your election policies might be. So everybody recognised that it was important to have the capacity for the government, opposition parties and members to do their work and to protect that within the context of the allocated resourcing. Whilst, as I acknowledged just a moment ago, I appreciate the Labor Party putting up the money to establish the Parliamentary Budget Office, it will still not be a huge bureaucracy and it will not be able to deal with a massive onslaught in an election campaign of a whole variety of possible policies. So I agree with what we came up with in the committee after considerable discussion with all concerned.

What is more, it was not just the members of parliament on the committee who got to express a view. The committee asked for the political parties themselves to come before the committee and set out to the committee what their concerns might be about contesting elections, whether from a government or an opposition point of view. This was one of the fairest committees that I have been part of in the parliament in terms of listening very carefully to everybody's views and working hard to come up with a consensus report.

On that basis, I find it extraordinary that the coalition can now run away from that. This just reiterates to me that the coalition have no idea at all how they are going to make up the $70 billion black hole they already have plus the superannuation funds they already have. And we have the promises from the Leader of the Opposition that he is going to increase pensions, cut taxes, find $70 billion plus the superannuation funding, and it is all going to come from some magic pudding that they put to some private auditing firm with assumptions that nobody can actually test against those policies. It is essentially a strategy to try to protect them from the scrutiny that they deserve on their economic policy.

To date, the coalition have been able to get away with their 30-second grabs: 'Yes, we are going to cut taxes. Yes, we are going to increase pensions. No, we are not having carbon pricing. Yes, we are going to pay the polluters. Yes, we are going to provide all of this. Yes, we are going to cut public servants but we are not telling you where or by how much.' What are they going to do to health services? What are they going to do to education services around the country? It has not been possible to have that scrutiny. I do not want us to end up in the next election campaign in 2013 with a coalition standing up saying, 'We can do all of these things and it is within this context that we have released, signed off by these auditors and chartered accountants,' or whoever. No, we want some level playing field here so that the community is not conned on this. They were conned about the mining tax by the huge advertising campaign that the big miners were able to mount. The community was completely conned and it is only now that the community has found out that 'Twiggy' Forrest, who was one of the people fronting that campaign, has not paid corporate tax in seven years and does not expect to pay anything under the new MRRT. He led the campaign when he has not paid a cent in corporate tax for seven years. Gina Rinehart has become the richest person in the world—and she is running a campaign saying the Australian community does not deserve to have money from its own resources in order to provide health and education services!

We need to get real here. The Parliamentary Budget Office is an important parliamentary reform. The Greens took it on as a policy. We put it in the agreement with the Prime Minister in order to deliver a good government. The Labor Party became government as a result of this agreement, which provided for carbon pricing and a Parliamentary Budget Office. I congratulate the government for taking the agreement seriously and delivering on the undertaking the Prime Minister made when she signed it, and that was to deliver a Parliamentary Budget Office in 12 months after having established a committee on which representatives of all parties were there. It was a consensus decision and there should be consensus support for a major parliamentary reform. I reiterate, the only reason there is not consensus is the coalition are cowards—they are running away from scrutiny.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

I do not know where to start after a piece like that. Yes, of course, we support a Parliamentary Budget Office. We obviously support one that does the job, that allows us the capacity to act in a way where we are not confined and not exploited, but this process would leave us open to exploitation. There are a whole range of things that I will go into later on.

I want to touch on why we need a Parliamentary Budget Office. We need a Parliamentary Budget Office to deal with the issues which are the complete and utter rolling fiasco that you see at the moment with this government. We could start with the carbon tax. A policy costing on the carbon tax would be a good thing for the Parliamentary Budget Office to look at. We know that when they modelled it they took into account that the whole world, in one global position, would be participating in a carbon tax. Then we had the President of the United States of America out here merely a week ago saying that we were taking a very bold position and that we were very courageous, which is code for, 'You are completely and utterly off your head.' We are going down the path of a carbon tax of $23 a tonne when we know that no-one else in the world is doing it. We are out there. We are better than a lemming. At least lemmings take other lemmings off the cliff. We are doing this by ourselves—a solo lemming job. It would be good for the Parliamentary Budget Office to look at the implications and costings of that.

It would also be good for the Parliamentary Budget Office to have a look at the mining tax and the implications of that. This is another thing that we are just supposed to accept. As I have said before, the Greens have this passionate dislike of mining. It is very much pythonesque. It is very much Life of Brian. I always remember the demise of Brian, when John Cleese said, if I can use an analogy: 'Your death will stand as a landmark in the continuing struggle to liberate the parent land from the hands of the imperialist mining aggressors, excluding those concerned with drainage, medicine, roads, housing, education, viticulture and any other miners contributing to the welfare of Australians of both sexes and hermaphrodites. Signed on behalf of the people's liberation front or the people's front of Judaea. I would just like to add a personal note of my own admiration for what you are doing for Australia in what must be a very dark and hard time for you.'

The Greens have this pathological dislike of mining. They always ask: what has mining done for Australia lately? Well, quite a bit—Ballarat, Bendigo, wealth, keeping us out of the recession, regional development. It is our largest export. These are just a few of the minor things. I do not know whether we could put aqueducts and viticulture up there with them, or medicine, I suppose. But the Greens have a pathological dislike of mining. In this pathology of theirs, they are willing to play this crazy game with the Australian people—and with the Labor Party, which they are playing with like a cat plays with a ball of twine. Right as we speak, we and the Labor Party have no idea whether the mining tax is going through or not.

I also want to address a few other things, including this statement about the $70 billion black hole. It is one of these things where, if they keep saying it enough, ultimately people will believe them. That is their process, but it is not working. You can see that in the polling. People do not credit the Labor Party with anything anymore. People think they are completely and utterly incompetent. Obviously what they are doing is taking into account the loss of revenue streams, which is fair enough, but they have failed to take into account the loss of expenditure streams. If you take out the loss of expenditure streams, you will find that if you got rid of the carbon tax you would be about $4.3 billion better off over the forward estimates to 2014-15. Australia would be better off without a carbon tax. We would actually have money in the bank.

Now we are seeing in the latest reports on the mining tax that it is going to cost about $13 billion over the forward estimates for all they have promised, but at the best it is only going to raise about $11.1 billion. At the very best it could raise that much. So what is the purpose of this? This is the only crowd I have ever met who can bring in a tax which costs the country money. It is just beyond belief. It is like going to the shop and buying an ice cream and delivering them more than you took away. It is a perverse form of economics. The reason they get themselves into these ridiculous traps is that they are beholden to the Greens, who have no real desire to run the country. Julia Gillard is like Romulus Augustus: she is there when the Vandals come in. They love the trappings of office but they have no desire for the real responsibilities of running the country, but the Labor Party is foolish enough to let them run it for them, and to do it from a courtyard near them every day.

I would love the Parliamentary Budget Office to look at the NBN. I see that the take-up rate in Armidale has been as low as one in 50 homes. They always put Armidale up as the light on the hill. One in 50 homes has taken it up. That is not a very good business plan. This thing is starting to walk a lot like a white elephant and make noises a lot like a white elephant, and what it is doing to the budget smells a lot like what a white elephant would do. This thing has just launched itself at us.

We heard a statement from Senator Conroy. A spokesman for Senator Conroy said the take-up rates were 'no longer a relevant issue'. They are if you believe in business plans, which they did not have. This thing is a $36 billion network which we never did a cost-benefit analysis for. It is absolutely remarkable. Then we have to add the lease payments on top of that and any interest costs on top of that. And by the way, on closer examination—and this is something that has not been seen—they are issuing the debt just for Australian government securities outstanding, just like any other debt. So this debt is just going to be smacked on with all the other debt, which currently stands at $217 billion gross. I noted that the other day and I thought maybe they were issuing their own bonds, but they are not. It is just AGS. You will be able to see it. It will be out there with all the other money that we have borrowed, and we cannot finance it. That would be a good thing for the Parliamentary Budget Office to look at.

Given the precarious position the world is in, the Parliamentary Budget Office could look at the global situation and the issues that are before us at the moment. We believe in a Parliamentary Budget Office, but we believe in one that allows us the capacity to have greater scrutiny of the information, because the opposition, whoever that is, is always at a disadvantage compared to the government. The government have their own Parliamentary Budget Office; it is called the Treasury. They can walk in and out every day and everything they say is confidential. Treasury can deal with it. We are at a complete strategic disadvantage. So there are certain things we must have to be able to have some form of confidence. We have put up a bill for a Parliamentary Budget Office, so let's dispense with the idea that we do not believe in a Parliamentary Budget Office—we do.

The government's bill requires the PBO to make arrangements in writing with the head, however described, of a Commonwealth body to obtain information and documents relevant to the Parliamentary Budget Office's functions—in other words, to agree with a memorandum of understanding. Our bill does not say you have to agree with a memorandum of understanding. It gives greater versatility in how you act. There is greater capacity in our bill for impartiality. What we will see under their bill is that every time we take something to the Parliamentary Budget Office—because we do not have the capacity which they have to go back and forth to Treasury—the day after you will read about it in the paper; it will be out there. So this makes it a very difficult organisation to work with because we will be put at a strategic disadvantage. If we were allowed the same confidentiality with our use of Treasury, it would be different.

Treasury, of course, is an arm of government and has hundreds of millions of dollars in resources. We have to allow for the fact that with the much smaller resources of a PBO we have to have something that will give us some sort of fair ground to work on, which will mean a greater confidentiality in how we work with them and not having to be tied up with memorandums of understanding and with ultimate disclosure to the public. The coalition's PBO, for instance, provides complete confidentiality for all requests from MPs and senators. It will allow non-government members and senators to engage in discussions with the PBO as well as allowing views to be changed in a private domain. The Parliamentary Budget Office would not be permitted to publish costings without the permission of the non-government member or senator. These are the sorts of protections you need when you do not have what they have, which is Treasury.

Both parties were asking for a Parliamentary Budget Office. The issue is not about whether we have a Parliamentary Budget Office; it is about the form the Parliamentary Budget Office takes. Now more than ever we need one. We do not know when the next election is going to be. It could be at any point in time. It could be when Mr Rudd retires or ultimately throws teddy in the dirt—and that is the end of that and the balloon goes up—and we have an election, or when someone decides that they have had enough and they see themselves falling at the high jump, and they pull the pin. We could have an election at any time. So it is important that we get the proper Parliamentary Budget Office through.

Just to go back to another issue: there is no $70 billion black hole. This is the sort of thing that you need a PBO for: to dispense with these ludicrous claims that the Labor Party make ad nauseam in the perverse belief that if they say something that is incorrect enough times then somehow people will believe them. When the finance minister or the Treasurer do that, it shows that they are inherently desirous of misleading the Australian people, because they know what the truth is but they say something which obviously is entirely different.

We need an independent arbiter to go out and say: 'What the finance minister said to you is not correct. There is not a $70 billion black hole.' In fact, to be honest, the finance minister would not have a clue. The finance minister is great with the wondrous flowery statements and the back of the Weeties packet rhetoric, but when you get down to the details of an issue she is completely and utterly at sea. We saw that with the carbon tax. That is why they love to guillotine these debates: to try to avoid displaying to the Australian people the fact that they are ignorant of the technical details of their legislation. If you ask them a technical question, they will never have an answer. They just do not know the answer. What they have are grandiose, rhetorical, BlackBerry-delivered talking points and that is where basically it stops.

If a finance minister was worth their salt, we would not be $217 billion in gross debt. We would not have borrowed $2 billion just last week. We would be in a better financial position. Even as we speak, the Treasurer is trying all these little tricks. They are pulling forward expenditure from future years and jabbing it into this year to try to somehow save themselves down the track from an impossible scenario. They are just not competent and could not possibly give you a surplus. They could no more give you a surplus than sprout wings and fly around the chamber. It is beyond their capacity.

I remember back when they started talking about a surplus. Why do I say this? Because week on week, you see a structural deficit in what they do. Because their actions and the way they are conducting themselves have not structurally changed then, quite evidently, they are going to end up in a position of a resultant deficit down the track. It is a simple rule of accountancy. If you keep acting like you acted yesterday, you will end up in the same destination as you were going yesterday.

That is a problem with the Labor Party: they have failed to grasp the nettle of really dealing with the issues with their structural day-to-day finances, their cost controls. If you want to look at where the holes are, it is beyond just the ceiling installation program, the building the education revolution and all the other waffle; all those other $900 cheques that went out and the $22.8 billion in a day, or whatever it was—in fact, it is worse than that.

They cannot control their day-to-day costs. The best reflection of that is when you see them issuing securities to try to prop up their structural deficit, and they do it week after week after week. Two years ago, I remember looking at where they were going and I thought they were heading to oblivion. When I looked at my analysis from two years ago, their position now is worse. The debt unfortunately for Australia is going to be the great truth serum. You cannot get away from debt. You can use all your Weeties packet rhetoric to get away from debt.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

You just keep adding state debts in there to make your point. Don't forget to add the local councils in!

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

They always get upset when you mention debt because they know that that is where they are vulnerable. They do not understand that they are $217 billion in gross debt. Do you understand that, Minister Conroy?

Senator Conroy interjecting—

All of it—you fool! All of it. That is it. That is how stupid he is. There is $217 billion of Australian government securities and how much of that is Commonwealth? The whole lot.

Senator Conroy interjecting—

That is the classic example of how completely and utterly incompetent they are. He just asked on the Australian Office of Financial Management website, a Commonwealth government website, 'What Australian government securities are outstanding? How much of that is federal debt?' The whole lot, you clown. And they are running the country, and that is what we are seeing in the person who sits in proxy—

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Order! I call the chamber to order. Senator Joyce, address your comments through the chair.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

They cannot help themselves.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, I have a point of order. You did not mention the interjections, consistently and loudly, of Senator Conroy. I suggest you make your address also to Senator Conroy.

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

There is no point of order. I called the chamber to order.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

Thank you, Mr Acting Deputy President. This is why the whole of Australia is so concerned about the carbon tax. This single frolic to change the temperature of the globe from a room in Canberra, issuing to the Australian people a broad based consumption tax delivered by every power point in their house to make every aspect of their cost of living dearer—a tax on all the people of Blacktown, of Ipswich, of Pennant Hills and the people of Rockhampton and of Gladstone, a tax that says you can have cheap wages or cheap power. We have now decided that cheap power is not for us so it is either cheap wages or no jobs.

In the past the party of Curtin and Chifley would never have agreed to something as absurd as that but this is not the party of Curtin and Chifley any more. It is the party of Senator Bob Brown, Mr Tony Windsor and Mr Adam Bandt. That soul that it once possessed was of an incredible party. There are two statues of Curtin and Chifley down near Old Parliament House. What would those men say if they walked into what we have here at the moment? They would say, 'Who are these people? Who's running the show? What happened? What happened to it all? Where did it all go?' The party has been sucked into these nutty positions. It said the right thing before the election when it said they were not going to have a carbon tax. That seems a logical thing to do. No-one else in the world is having it.

Then the real dynamic of who is running the show became present—the political vandals, the Visigoths and the Ostrogoths turned up and they started to run the show. The result is the carbon tax, the mining tax—a mining tax which even as we speak shows we do not know where we are. We do not know whether Bob Brown is supporting it or not. It is lunacy. You should have kept your dignity and said, 'No, enough of this farce. Enough of it. No, it stops and it should have stopped yesterday.' After that press conference, the Prime Minister should have said, 'No, this is where the lunacy stops. No more being run by courtyard press conferences. We are taking back the reins and we are going to run the show.'

Of course, we did not get that. The lunacy still rolls on. We will go to Christmas with this Pythonesque form of lunacy. What has the mining tax done for us lately? Nothing except kept us out of recession; developed as our major export.

We need a Parliamentary Budget Office. We need it on fair terms. We have not got it on fair terms in this current bill. There is obviously a distinct strategic advantage for the position of the Greens-Labor Party-Independents alliance. They have their parliamentary budget office but we do not have a fair parliamentary budget office. It is very important for the Australian people to know that we believe in a parliamentary budget office. We believe in one that is fair, that we can work with. We believe in one which does not compromise our negotiations and our capacity to work with that organisation.

We acknowledge that the Greens-Labor Party-Independents alliance has an immense strategic advantage. The glee club has an immense strategic advantage because they have the Treasury at their disposal. We have to make sure that what we get is something that we can show to the Australian people so that we can dispense with these fallacious statements like the $70 billion black hole. We need it so that we can do it.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Andrew Robb said it was true.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

As they know, if you want to understand what the Labor Party is, it is the carbon tax, it is the mining tax, it is the NBN and, as we speak, $270 billion— (Time expired)

John Faulkner (NSW, Australian Labor Party) Share this | Link to this | Hansard source

It would come as a real surprise to anyone listening to this debate—that is, if there is anyone listening after Senator Joyce's contribution—to realise that this is a second reading debate on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011. I am going to break with the precedent of Senator Joyce and actually address the legislation that is before the chamber.

After the last election, an agreement for a better parliament—parliamentary reform—was negotiated between the political parties and Independent members of the House of Representatives. That agreement included commitments about the resources of the parliament, including the establishment of a Parliamentary Budget Office. I share with the chamber the wording of the agreement:

A Parliamentary Budget Office be established based in the Parliamentary Library to provide independent costings, fiscal analysis and research to all members of parliament, especially non-government members.

It goes on:

The structure, resourcing and protocols for such an office be the subject of a decision by a special committee of the parliament which is truly representative of the parliament.

That agreement stands in the names of Mr Christopher Pyne MP, Mr Anthony Albanese MP and Mr Rob Oakeshott MP.

To progress the commitment in the agreement to establish a special committee of the parliament, a Joint Select Committee on the Parliamentary Budget Office was established. I chaired that committee. The Deputy Chair of the committee was Mr Pyne. The committee members represented the Australian Labor Party, the Liberal Party of Australia, the National Party and the Australian Greens. Mr Oakeshott, an Independent in the House of Representatives, also served on the committee. Unusually for such a parliamentary exercise, that joint select committee brought down a unanimous report in March this year. Twenty-eight recommendations of the report were agreed to by each and every member of that joint select committee.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

It was a consensus.

John Faulkner (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Milne comments, correctly, that it was a consensus. It was a unanimous report. In July, the government responded to the joint select committee's report. Of the committee's 28 recommendations, all were accepted; 23 were agreed and five were agreed to in principle. The government had announced in its budget this year that it would provide $24.9 million over four years to establish the Parliamentary Budget Office. In late August this bill was introduced into the House of Representatives, embracing the commitments contained in the agreement for a better parliament—parliamentary reform—and the recommendations of the Joint Select Committee on the PBO. Now the legislation is opposed by the coalition. It is really no wonder that people become cynical about politics and politicians.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

Yes, when you promise not to introduce a tax and then introduce it.

John Faulkner (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Let us look at the record. We know that you are a particularly divisive force in the chamber, Senator Macdonald, and you appear to have a great deal to say—most of it nonsense. But as far as the establishment of a PBO is concerned, let us run through the record. Here is the record. Mr Turnbull, when he was Leader of the Opposition, advocated for the establishment of such a PBO in his budget reply in 2009. Mr Abbott, as Leader of the Opposition, renewed Mr Turnbull's call for a PBO and included the establishment of a PBO in his election platform for last year. Former Liberal senator Guy Barnett introduced a private senator's bill into this chamber, the Parliamentary Budget Office Bill 2010, again to establish a PBO. The coalition signed a broad cross-party agreement after the 2010 election which included a commitment to a PBO. The coalition agreed to the establishment of a joint select committee. The coalition served on that joint select committee, including representatives at a senior level: the Leader of the National Party in the Senate and the Manager of Opposition Business in the House of Representatives, Mr Pyne, who was the deputy chair of the committee.

The Liberal Party provided a submission to the joint select committee. The committee brought down a unanimous report embracing the letter and the spirit of the Liberal Party submission to that committee. The government, I believe acting in absolute good faith, agreed with the joint select committee's recommendations. The government then funded the Parliamentary Budget Office in this year's budget and the government then introduced enabling legislation for the establishment of the PBO into the parliament. That is the legislation we are debating today.

This is not or should not be a partisan measure. It will work in the interests of all parties in this parliament. This legislation does not in any way offend the critical values of enhancing transparency of process, of ensuring the principle of equity of access to PBO services and of maintaining the separation of the parliament and the executive. This is very good legislation. I believe that the processes leading up to the introduction of this legislation have also been in accordance with parliamentary best practice.

So where do we find ourselves now? Well, the shadow Treasurer, Mr Hockey, informed the House of Representatives on 12 September that 'the coalition would not submit its policy costing to either the Treasury or the PBO prior to the election'. He said, 'We will ask the Australian people to form a view on policies as they stand.' This approach is not in anyone's interests. It is certainly not in the interests of the opposition. Do not forget that the Treasury found an $11 billion hole in the costings of the policies that Mr Hockey and the coalition presented at the last election. How could it be in the interests of a serious opposition to turn its back on the policy development assistance provided by a PBO and the costing resources that are provided by a PBO? That is a service to the parliament that is independent and a service to the parliament that is rigorous. It is a service that would be absolutely confidential outside election periods and fully transparent, as it should be, during election campaign periods.

In my view, the opposition is acting against its own interests, it is acting against the public interest and it is acting against the national interest by opposing this bill and turning its back on the services offered by an independent Parliamentary Budget Office. I will make a prediction in this chamber—and I have a very good record as far as the predictions I make in the chamber go—

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

In your opinion.

John Faulkner (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I do. I have a very good record. Just look at the predictions I made about the fate of a few Liberal Party ministers. All of them came to pass. I do not make many predictions, but I am going to make another one; let's see if it comes true, Senator Macdonald. I predict that it is the opposition that will suffer most as a result of the decision it is taking in the parliament this week to oppose this bill. It is an absolutely inexplicable and wilful decision that the coalition is making—an attitude that is absolutely unable to be sustained or explained, an attitude and approach of not submitting costings to the PBO. I predict that in the next election campaign, just like in the last one, the opposition will inevitably face the charge that its election campaign policy costings lack credibility. That is what you are doing by taking this approach. Inevitably, the opposition's motivations in doing so will be questioned—and they should be, in my view. The opposition's approach to this bill means that this is a bad day for parliamentary integrity. The opposition's approach on this bill means that this is a bad day for integrity in politics.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

I follow on from where Senator Faulkner left off. He is talking about integrity in politics! How about this for integrity? A day before the last election the Leader of the Australian Labor Party gets up, hand on heart, and swears and promises to the people of Australia, 'There will be no carbon tax under a government I lead.' Within three or four months she has changed her view completely. Here we are, one year later, with a government that she is leading—for the moment—and with the carbon tax she promised never to introduce. And Senator Faulkner deigns to lecture us about integrity in politics!

The thing I can say about Senator Faulkner's speech—and I congratulate him for it—is that he just did a 20-minute filibuster which will continue to deprive the opposition of the ability to debate, scrutinise and hold the government accountable not only for the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011 but for another five bills that are going to be rammed through this parliament today without a word of debate. As we have seen in the last two days—and this is a disgrace and a condemnation of the Australian Labor Party and the Greens—there have been nine bills, I think, passed in this chamber with not one word of debate. Because of a guillotine by the Greens and the Australian Labor Party, there have been nine bills passed through this parliament with not one word of debate on them. We are going to see the same today and we are going to see the same tomorrow. And the Australian Labor Party still tries to pretend that it is a democratic party. The only democratic Labor Party member in this chamber is the representative of the DLP, who at least understands that you cannot ram legislation through this chamber without even one person having the opportunity to speak on it and to hold the government accountable.

I am looking forward to the support of the Greens for the amendments that have been foreshadowed by Senator Cormann and which the coalition will be moving to make the Parliamentary Budget Office the way it should be—truly independent and truly able to perform its duties as a Parliamentary Budget Office. Those amendments that Senator Cormann has foreshadowed and that will be moved by him on behalf of the coalition will make the process that is set up under this bill proper. They will make it independent, they will make it confidential and they will make it useful, and they should make this a bill that will attract Greens support. In spite of Senator Milne's speech earlier—which seems to have been written for her by the Labor Party—I remind her that on 23 September Lenore Taylor and Peter Martin reported:

The Greens have offered to amend legislation setting up a parliamentary budget office to avoid a boycott threatened by the Coalition when it failed to secure changes in the lower house.

So I look forward to your support, Senator Milne. Perhaps I should look forward to the amendments you might be going to move? You have not flagged that you are going to be moving amendments. I assume from that that perhaps you have lost your enthusiasm for making this Parliamentary Budget Office proper, independent and confidential.

What happened in the last couple of months that might have made the Greens political party change its mind, I am not quite sure. Perhaps it was just another one of those dirty, dodgy deals which seem to be being done by the Greens and the Australian Labor Party every day. We heard on the news this morning that the Greens and the Labor Party had done a deal to get the mining tax through the other chamber. Nobody knows what the deal is. It is not being revealed to the Australian people—certainly not to the Australian parliament. Nobody will be able to scrutinise it. They might release some details next week, after the parliament has risen for the parliamentary recess of two or three months.

Listeners may recall that, when Ms Gillard became Prime Minister this last time, it was to be 'a whole new paradigm'. Remember the words? A whole new paradigm of accountability and openness and everybody understanding what was happening. Yet, last night, what do we get? A dirty, dodgy, midnight deal between the Greens and the Labor Party to get through a mining tax which is actually going to cost the budget bottom line. The way this government operates is just a shambles. You only have to talk to any member of the public to understand what a shambles this is and why Australia is currently lacking any confidence whatsoever.

I see Senator Waters sitting there. Perhaps she will be participating in this debate and perhaps she will be alerting the Senate to the amendment the Greens said they were going to move to make this bill and the process more appropriate. Quite contrary to what Senator Faulkner filibustered about in his 15 or so minutes, the coalition actually supports a proper Parliamentary Budget Office. In fact it was the coalition's initiative; it was an initiative which the coalition took to the last election. It was part of our policy and it is still part of our policy. Senator Faulkner quite rightly mentioned that the coalition actually introduced a private member's bill to set up the Parliamentary Budget Office. Was it supported by the Labor Party? Was it supported by the Greens political party? It was an election commitment. We brought it forward as we said we would. We brought it to this parliament, with no support from the Greens and no support from the Australian Labor Party. Yet suddenly they bring in this watered-down version which they know will not work, which they know will not be accepted and which even the Greens have said needs amendment. So I certainly look forward to the amendments.

I appreciate the fact that Senator Cormann has been through the bill at some length and has indicated the coalition's position on it. I acknowledge that Senator Cormann will be moving the coalition's amendments and more explicitly detailing them in the Committee of the Whole, but I will briefly touch on a couple of the proposed amendments. The current bill, the bill before this chamber, relates to functions of the Parliamentary Budget Officer. Item 16 of schedule 1 precludes the Parliamentary Budget Officer from preparing economic forecasts or preparing budget estimates—it actually precludes him from doing that. Proposed section 64E states that the Parliamentary Budget Officer 'must use the economic forecasts and parameters and fiscal estimates' contained in the most relevant recent economic reports. These proposed provisions essentially constrain the Parliamentary Budget Office to using only the 'official' economic and budget forecasts in its work. They would seem to constrain it from undertaking any independent assessment or analysis of the economic or fiscal impacts of policy proposals. They would also seem to prevent it from preparing longer run economic or budgetary projections beyond the period of the forward estimates. These proposed sections seem to be at odds with the purpose of the Parliamentary Budget Officer as outlined in proposed section 64B, which states that the purpose of the Parliamentary Budget Officer is to provide independent analysis of the budget cycle, fiscal policy and the financial implications of proposals. So Senator Cormann will later be moving amendments to those clauses to give the Parliamentary Budget Office the power to prepare its own economic forecasts and budget estimates or to have regard to existing forecasts or budget estimates as it sees fit. That will allow the Parliamentary Budget Office to fully meet its objective of providing truly independent analysis of fiscal policy and the financial implications of proposals.

There are seven amendments to be moved by Senator Cormann and, as I mentioned, he will detail those later. But I will just to refer to another provision about confidentiality. We want to make it clear what information can be publicly released by the Parliamentary Budget Office in the normal course of its duties and what information cannot be released without the explicit direction of the senator or member who has put up the proposal being costed. These amendments will allow the office to get on with its job of publishing independent analysis of the budget cycle and fiscal policy whilst preserving that confidentiality of costing information on policy proposals from MPs and senators that is so essential if this arrangement is going to work. It is essential that the Parliamentary Budget Office be able to accept proposals from senators and members, to cost them, while keeping them confidential to the senator or member. The senator or member can then have a look at the costings and might well say: 'I thought that was a good idea. Now that I see from this independent office what it is going to cost, perhaps I am not going to proceed with the idea because it is outside the budget parameter I was anticipating.' That is why these things have to be confidential until such time as they are announced as the policy and then, of course, the costings are made public. What could be fairer than that?

The way the Greens and the Labor Party want to handle this is that, if you have an idea and you take it to the Parliamentary Budget Office and say, 'Cost this,' you immediately see the costings on the finance department's website. Even if you then decide, 'Because of the costs related to it, I am not now going to proceed,' it will still be there. You can imagine with the dishonesty of the Labor Party and the way they go on—and we never expect any honesty from the Greens—that all sorts of deliberately wrong assumptions will be made. That is why the private member's bill that we put up, our policy announcement—and, I repeat, we thought of this first—and our amendments show that this has to be a confidential arrangement until such time as they become policy issues and then are released to the public.

People say, 'Why wouldn't you trust the Australian Labor Party and their advisers?' I repeat: why would anyone in Australia trust a government whose leader promised before the last election never to introduce a carbon tax and, immediately she was elected, introduced that carbon tax? Why would you believe anything the Labor Party or the Greens say about any budgetary matter?

I heard Senator Faulkner talking about costs of government and fiscal responsibility. I remind Senator Faulkner that in 1996—when the last Labor government was thrown out on its ear—the then Labor Prime Minister promised us that everything was okay with the budget, that it was balanced. But, when we got into power at the 1996 election, the first thing we discovered was that we had been lied to, that there was actually a $10 billion deficit in that year alone, in 1996. There had been figures of debt bandied around but the true figures had been kept from the Australian people. We found that the last Australian Labor Party government had run up a total debt of some $96 billion. If the Labor Party were running a business—and they never would because none of their people have ever been in business; they have only ever been union hacks or Labor Party functionaries and would not understand business—they would have been declared bankrupt. Then the new government led by John Howard and Peter Costello came in and, over a space of eight tough years, paid off Labor's $96 billion debt and, more than that, through sound financial management and good economic judgment the Howard government actually put aside $60 billion for the future rainy day. It took the Rudd government less than two years to blow the $60 billion credit we had set aside and to run us into debt and deficit. Now here we are just four years later with a gross government debt of over $200 billion. We have a net government debt of over $107 billion. Obviously, it will be left to the next coalition government to start paying off Labor's profligacy yet again.

Labor simply cannot be trusted with money. They cannot be trusted with the Parliamentary Budget Office. They cannot be trusted with the parliamentary process. And the Labor Party and the Greens have just introduced a carbon tax, which they promised would never be introduced, and what do we find? As a result of this carbon tax, our carbon emissions are going to go up by 2020. We are going to be emitting more carbon and we are going to have this huge carbon tax which will increase everybody's costs of living and make electricity prices soar. That is the sort of financial management you get from the Labor Party and the Greens.

Last night the House of Representatives passed the mining tax, which is going to increase the deficit on the bottom line of the budget. How is that for great financial management? The Labor Party are the only party in the world that could introduce a tax which, in the end, means we are worse off. That is typical of Labor Party mismanagement of funds.

This initiative of the coalition for the Parliamentary Budget Office is a good one and with the amendments the coalition propose this will be a good addition. I look forward to the Greens support for our amendments because the Greens said publicly that they would support sensible amendments that would make this bill proper and they would sign on to it. We know how hypocritical the Greens political party are. We know how they say one thing one day and another thing another day. We hear them railing against the multinational miners. Then we have a look at the flood tax imposed by this parliament earlier this year. Who paid the flood tax? Individuals. Did BHP, did Rio Tinto, did Xstrata, did Coles or Woolworths?

No. The Greens let those big multinational companies that they now rail against off the hook. They gave them a free ride. Yet here they are doing dirty deals with the Labor Party at midnight to get that stupid tax through the other place.

This Parliamentary Budget Office with the coalition's amendment will be a real plus. It will be a real positive for the whole parliamentary and election processes that will bring some fairness, openness and accountability into the system—something we promised before and something we tried to introduce via a private member's bill that neither Labor nor the Greens supported. It is something that we hope we will achieve today if, as I anticipate, the Greens will support our amendments.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I rise to contribute to the debate on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011. It is pleasing to see this place debating the idea of the establishment of a Parliamentary Budget Office, but it is a great shame that, like so many good ideas that come before this Gillard-Brown Labor government, the government is taking a good idea and turning it into something very bad and smelly.

The coalition has been calling for a Parliamentary Budget Office for many years. Indeed, the member for Wentworth a number of years ago when he was shadow Treasurer led the charge for this. I also believe that my then fellow Tasmanian senator, Guy Barnett, took a great interest in the Parliamentary Budget Office, and many others on this side of the chamber have been calling for a Parliamentary Budget Office, for good reason. Such a move would continue the coalition's proud record of budget transparency, most recently highlighted when we won government in 1996 through the implementation of the Charter of Budget Honesty.

At that time there was very good reason for us to do this. Having won government in 1996, we found that there was a $96 billion black hole that the previous Hawke and Keating governments had left us. In the lead-up to that election the fiscal situation that the government had presided over, as presented to us and to the Australian voting public at that time, was quite different from the reality that we found when we got into government. It was so different that I will not be overstating it to say that the then government had misrepresented the fiscal position, with the end result that the incoming government in 1996 found that the fiscal flexibility it had to deliver its program was severely undermined and reduced. Essentially, the Australian public had been duped by the previous Labor government over the latter's fiscal handling of the economy. As a result of that, the then Howard government moved to set up the Charter of Budget Honesty to ensure that in the lead-up to any future elections the opposition of the day, together with the public, would have an accurate and full understanding of the true fiscal position of the government. This would mean that the public could make informed choices and that the opposition of the time could formulate its legislative agenda and its program as a new government in the full knowledge of the true fiscal position of the government and its capabilities.

This leads me onto the Parliamentary Budget Office. This idea takes the delivery of transparency to a new height. However, the government's proposed delivery of a Parliamentary Budget Office leaves a lot to be desired. Two bills to establish a Parliamentary Budget Office have been brought before parliament in recent times: the shadow Treasurer introduced a private member's bill to establish a Parliamentary Budget Office on 22 August and, surprisingly, the government introduced its own bill on 24 August—just two days later. Having examined both bills—and I think the coalition's view is that ours is not going to get up—we will propose amendments to the government's bill to try to take what is a good idea executed very poorly and try to fix the mess and turn it into something that will actually deliver the outcomes that a Parliamentary Budget Office should deliver. In the instance that we are not successful, the coalition will not be supporting the government's bill in an unamended state, because we do not believe that it will deliver what is intended nor the benefits that should flow to parliament and to the Australian people from having a properly-running and effective Parliamentary Budget Office.

The government has chosen to amend existing acts in order to establish its Parliamentary Budget Office. Schedule 1 amends the Parliamentary Service Act 1999. This schedule establishes the Parliamentary Budget Office and includes its purpose and functions, its access to information and its oversight arrangements. It outlines employment conditions and arrangements for the Parliamentary Budget Officer and introduces a requirement for a Parliamentary Budget Officer to prepare an annual report. Schedule 2 amends the Charter of Budget Honesty Act 1998. This schedule amends the charter to clarify the processes associated with the provision of policy costings during a caretaker period, including requests made before polling day and requests made on or after polling day. It also amends the definition of 'caretaker period' within the charter so that it is consistent with the definition in the guidelines on caretaker conventions. Schedule 3 amends the Freedom of Information Act 1982, the Remuneration Tribunal Act 1973 and the Long Service Leave (Commonwealth Employees) Act 1976. This schedule exempts the Parliamentary Budget Officer and the PBO under the Freedom of Information Act 1982 and amends the Remuneration Tribunal Act and the Long Service Leave (Commonwealth Employees) Act to ensure that these acts encompass the position of the Parliamentary Budget Officer. That is how the government is proposing to structure the change that will deliver the Parliamentary Budget Office.

Our opposition to it stems from the fact that it fails to deliver on a number of aspects that we believe a Parliamentary Budget Office should deliver. I will run through the difference between the government's position as represented by this bill and the coalition's position as represented in the bill that we put forward. One of the key differences is providing the Parliamentary Budget Office with independence from the Treasury and the Department of Finance and Deregulation. The government's position is that the PBO ought to be established under the government. It would deliberately ensure that the PBO is functionally little more than an extension of the Treasury and the Department of Finance and Deregulation, because it would require the PBO to make arrangements in writing to obtain information and documents, preventing the Parliamentary Budget Office from preparing economic forecasts and budget estimates. Contrast this with the coalition's position: we have made a conscious decision to ensure that the Parliamentary Budget Office is an independent body separate from the Treasury and the Department of Finance and Deregulation. It would be an independent statutory body. Under our proposal it would have strong powers to obtain information from government departments and government agencies. It would be able to provide analysis of economic forecasts and budget estimates.

Another key difference is in the powers granted to the Parliamentary Budget Office to obtain information. Under the government's bill, the PBO will be required to make an arrangement in writing with the head, however described, of a Commonwealth body to obtain information and documents relevant to the Parliamentary Budget Office's functions. In other words, it will need to agree to a memorandum of understanding. A Parliamentary Budget Office established under the coalition's proposal would not be constrained by memorandums of understanding put forward by government departments, who may very well wish to protect their positions, or agreements which stipulate what information the Parliamentary Budget Office may or may not have. The coalition's proposal would provide considerable information-gathering powers and secrecy for the Parliamentary Budget Office, which we consider vital if you are going to give it the teeth to achieve its fundamental purpose.

Another key difference is that the government's bill restricts the functions which can be performed by the Parliamentary Budget Office. Under the government's bill, the PBO will be specifically prevented from preparing economic forecasts and budget estimates, whether at a whole-of-government, agency or program level. This point seems to be at odds with the government's explanatory memorandum, where the mandate of the Parliamentary Budget Office has been described as 'to inform the Parliament by providing independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals'. Contrast this with our proposal, under which the PBO would be able to provide objective and impartial advice on the Commonwealth budget and budget cycle, including the impact of major policy announcements.

Another key difference is the confidentiality of policy costing performed during and after an election period. Under the government's proposal, as represented in the bill that we are debating today, the policy costing options put forward do not differ from what is currently available under the Charter of Budget Honesty Act 1998 during the caretaker period. The Parliamentary Budget Officer must publicly release any policy costing request as soon as possible after receiving the request during the caretaker period and on or after polling day. The government has also taken the extra step of ensuring that requests for the costing of policies or the withdrawal of policies to be costed, or the analysis of the budget, or costings and analysis for parliamentary committees and the results of any other work done in the performance of the functions of the Parliamentary Budget Officer made during the caretaker period and on or after polling day are publicly released by the Parliamentary Budget Officer. Contrast this with our position. The coalition's Parliamentary Budget Office provides for complete confidentiality for all requests from MPs and senators. This would allow non-government members and senators to engage in discussions with the Parliamentary Budget Office as well as allowing views to be challenged in the private domain. The Parliamentary Budget Officer would not be permitted to publish costings without the permission of the non-government member or senator.

That is one of the key differences between our proposal and that of the government. One of the real advantages of a Parliamentary Budget Office is that it should be answerable to parliament and not to the government of the day. It is a tool to equip members of parliament to properly do their job, to properly cost proposals they may wish to put before parliament for consideration and to enable them to do that in a way that allows them to properly plan it without exposing what they are doing to the public. The reality is that members of parliament from time to time may have ideas that they think are good ideas, ideas that they want to work through. But having worked through them they might find they are not fiscally possible in the current fiscal climate. This Parliamentary Budget Office would give members of parliament an opportunity to actually examine those issues without fear of that idea being exposed as fiscally irresponsible even though they might have initially approached it with the best of intentions and only found out after referring it to the Parliamentary Budget Office that it was going to cost more than they had anticipated. That then leaves it open to their political opponents to make political mayhem out of the fact that they were looking at it in the first place, which I think would tend to lead to a reticence on the part of members of parliament to actually put things forward to the Parliamentary Budget Office because they would be concerned about what might happen to it afterwards. As a result, potentially good ideas that they could be exploring and using the office to assist them with would never be explored and never come to fruition, even though they may have been a good ideas.

The idea of a Parliamentary Budget Office takes the delivery of transparency to a new height, but the problem lies in the way the government is seeking to deliver that. The primary role of a Parliamentary Budget Office should be as an independent assessor of government fiscal claims. The fact is that Treasury is not an independent assessor of government fiscal claims. That is not a criticism of Treasury. Treasury should never be considered a body independent of government. It is a government department that works to the Treasurer and the government and it is charged with responsibility for delivering policy decisions that are made by the government. That is the way it should be. A necessary consequence of that is that Treasury's role is to help the government deliver those policy decisions. To the extent that it is possible whilst retaining its integrity, it will present accurately and truthfully the information, data and modelling results with the best possible face that can be put forward in terms of assisting the government to deliver what it is doing. That is Treasury's role: they will go through the data, they will look at modelling and they will use it in the best possible way they can to assist the government to deliver its policy outcomes. That is not a criticism; it is just a fact.

Our Parliamentary Budget Office would be quite different in that respect because it would be answerable to parliament, not to the government of the day. As such, there is a potential through a Parliamentary Budget Office for us to have a completely objective, completely non-biased and fearless office whereby parliament can establish the reality of fiscal claims, claims about the current state of the economy and claims about the potential impacts that government policy decisions may have in the real world, without the constraint that is placed upon Treasury of effectively being servants to their political masters. An equivalent to the Parliamentary Budget Office has been employed in a number of other countries, including the United States, where they have the Congressional Budget Office, and Canada and Korea. They all have slightly different models and they do things slightly differently, but they are all independent. I do not think the proposal before us today delivers the same degree of independence that we see in any of those places, particularly those places where the system works well. In all of those organisations scope exists for an independent assessment of claims about costings, the fiscal position, macroeconomic positions like growth projections and so on, and they provide an additional assessment and a more independent assessment of those sorts of issues than you would get from their central treasury departments.

If we look at the last four years, we can see that this independent aspect of a Parliamentary Budget Office is sorely needed in Australia. Government projections on growth, program costings, the impact of spending and policies on employment and other measures have consistently failed to be reflected by outcomes. In some cases extraneous affairs have intervened, and the classic example of that is the global financial crisis. Fair enough, to some extent things that occur outside the control of government do have an impact on projections and the results delivered at the end of budgetary periods. But in most cases, and even during the depths of the global financial crisis, it is very easy to identify that many of these projections are based on what can only be described as heroic assumptions—such as record terms of trade or commodity prices continuing to rise ad infinitum or unseen periods of record growth or even other countries doing certain things—and it is patently obvious to any informed observer that the likelihood of such projections being delivered is almost nil. A Parliamentary Budget Office, if set up in the right way, would hopefully be able to conduct objective assessments of the issues, using the same information and data available to government agencies, and come to conclusions less influenced by the need to serve their political masters. This highlights the main advantage of a Parliamentary Budget Office—its masters are parliament and not the government.

There will be a small reversal of the trampling by the government of the role of parliament if a proper Parliamentary Budget Office is put in place. There has been a trampling of democracy in this place, particularly in recent days. The Greens have combined with the Labor Party to guillotine debate on bills in a way that I do not think this parliament has ever seen before. People point to the time we had majority government, between 2005 and 2008, but I do not think in any case any bill was passed through this place without one word of debate at any stage of its passage. In the last few nights we have seen bill after bill after bill guillotined—rammed through this place without any opportunity for any second reading debate, any committee stage or any third reading debate. There has not been one word said on any of these bills despite the fact that they are making changes that are important to the people of this country. They may have unintended consequences, they have huge impacts on Australians, and yet this place has had no opportunity to debate them.

That issue is not the subject of this bill, but I highlight it because a Parliamentary Budget Office does, if properly implemented, give an opportunity to redress some of the balance that has been lost in the last four years under Labor, and even more so in the last year under the Labor-Greens government parties, and to give a little bit of power back to parliament to ensure that parliament can properly assess claims that government is making and properly test the programs and projects that government is seeking to implement.

Over the last four years this government has been able to get away with murder in a budgetary sense. It makes claims and if those claims are backed up even semantically by Treasury the media swallow them. But the media never go back afterwards and ask why those claims were not met in reality. Very few projections or claims made by Treasury in their modelling over the last four years have been followed by figures anything like what was forecast. As I say, some of that is because of extraneous matters but a lot of it is because of heroic assumptions built into the modelling in the first place. Blind Betty could see they were heroic and unlikely to be delivered in reality.

This Parliamentary Budget Office proposal started off with good intentions. I think a properly constructed and well set up Parliamentary Budget Office would be of immense value to Australia and to the Australian parliament and would deliver fantastic outcomes for the people of Australia, but once again this government has taken a good idea and ruined it. I commend the opposition's proposed amendments and hope that the parliament will adopt them. (Time expired)

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

As always, it is a pleasure to follow Senator Bushby, who makes arguments in this place that are well considered, well constructed and really do highlight very sensible points of concern about legislation that comes before this chamber.

David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

You flatterer, you!

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

You will never catch me doing that to you, Senator Feeney. Never live in fear of that.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

On uranium, maybe.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Perhaps on uranium. It is disappointing that in this debate on the Parliamentary Service Amendment (Parliamentary Budget Office) Bill we are considering a flawed bill when there was such great potential and great opportunity. This proposal has the capacity, if we get it right, to change the way politics and the polity in this country work. It has the capacity to ensure we have a higher standard of debate, a higher standard of policy making, particularly during our election campaigns. Unfortunately, it looks like the government is going to get this wrong and miss its opportunity. This had the opportunity of being perhaps the one good, lasting thing to come out of minority government. There is not much to be said for the minority government we have functioning at present. There is not much to be said for the way the other place works, with its mishmash of crossbenchers determining what the government does. But when the crossbenchers, in negotiating minority government, said we should have a Parliamentary Budget Office, when they chose to adopt the policy first announced by the member for Wentworth on behalf of the coalition as a key criterion for whomever formed government, they grabbed hold of something that has great potential to ensure that oppositions, minor parties, Independents and backbenchers in this place are empowered to make far more constructive contributions to policy making than the current regime allows. However, this legislation fails to take that opportunity and make the most of it. In fact, it fails to make anything effective of that opportunity. If we do not fix this legislation by adopting these good amendments proposed by Senator Cormann then frankly it will probably be a waste of time to pass this bill. We will not achieve any of the good outcomes that could have come of it. However, if we adopt Senator Cormann's sound amendments we have a real potential to change the way campaigns and policy making work in this country.

Let me look from my own portfolio space at some of the policy making that we have seen in recent years. There are many, many lessons to be learnt from the multiple train wrecks that were once flagship environmental programs of the Rudd and Gillard governments. There are many lessons that can be learned. Some of them you can perhaps summarise in cliches, such as that we need to look before we leap. Any government and any party should take a serious look, and a decent Parliamentary Budget Office would help to take that serious look. Or we could make other cliched phrases about making haste slowly. However, this government has charged headlong into some very poor policy lines and promises.

A classic policy that I have spoken about many times in this place, but which has not had the same public exposure as some of the higher profile debacles like the Home Insulation Program, is the Green Loans Program. The Green Loans Program was a quintessential Kevin 07 promise. It offered 200,000 Australians interest-free loans to make them feel good about buying a more environmentally friendly fridge or the like. It came at the not insubstantial cost of $300 million but, importantly for the Labor Party, running in the 2007 election campaign, because of the way the policy was structured, the $300 million was a fixed cost and the budget impact of the program was capped. That meant that, when they announced it, they got the positive headlines from announcing a policy that would make a difference to the environment and their policy did not carry the risk that their costings could be wrong.

We see all too often in modern election campaigns that the parties, whoever they are, are restricted very much to announcing policies and campaigns that have a guaranteed fixed cap on their costing. Why are they restricted to those? Because every party in an election campaign fears being pinged with some type of budget error or mistake. It is far, far easier to say, 'We are going to give out X number of grants at X dollars,' which is a capped policy. That ensures that you do not run into any campaign trouble. Is that good policy? Frequently, it is not. Green Loans, of course, was a classic example of a bad policy. The policy turned out to be a complete and utter dog of a policy. Yes, it cost taxpayers around the $300 million that the Labor Party claimed in the lead-up to the 2007 election that it would, but instead of delivering 200,000 loans it delivered 8,000 loans—same cost; fewer loans.

The 2010 election had its own version of this policy from the Labor Party. There were none of those old power hungry fridges from Kevin 07's campaign. Instead, in the 2010 election, Green Loans was traded in for real Julia's cash-for-clunkers scheme. Cash for clunkers had of course the same type of policy formula: 200,000 cars were to be taken off the road, thanks to a $2,000 rebate. It was the classic construction of a safe policy for an election campaign designed purely to get newspaper headlines during the campaign and to avoid any threat that the costings could possibly be wrong. Simple costings: 200,000 cars; $2,000 rebate. There is your fixed cap. Absolutely no risk whatsoever.

All politicians chase a good headline in an election campaign. There is no sin there; that is the expectation. However, the need to minimise the potential for arguments or risks or the threat around costings blowouts is leading parties to submit and pursue what are, frankly, mickey mouse programs and bad policy. I am sure if those on the other side were inclined to do so they could give examples of policies of ours that have a similar construction with a similar capped cost, because we operate within the same paradigm and with the same concern not to suffer those types of potential cost blowouts. These debates about policy costings are as ubiquitous during election campaigns nowadays as the inevitable debates about leaders' debates. You see it during an election campaign: there will be a sustained debate about when the leaders will debate, how many debates they should have, who should moderate a debate, whether there should be an audience or not and which network will broadcast it. The same thing happens with costings. Throughout an election campaign there is constant argy-bargy between the government of the day and the opposition of the day, whoever they may be, about whether or not the other side will have a budget blowout or a budget problem. What happens when we have those debates is that frequently we forget to debate the merits of the policies being proposed. This legislation, if we get it right, has the capacity to stop having those mindless debates about whether one side or the other has a budget blowout in one of their policies and allows us to debate the merits of the policies. More important than getting away from having debates about costings is what those policies are. Serious reforms, if any of us in this place are being honest, are by their very nature complex. Serious reforms involve complex assumptions to achieve estimates of their budget impacts that are virtually guaranteed by their nature to be contestable. Treasury, with all of their models, as we so often see, get forecasts wrong as often as they get them right. Yet the media, somehow, expect both parties to produce bulletproof costings during election campaigns. That, of course, is an impossible task. If the Treasury cannot do it you cannot expect that the parties are going to produce bulletproof costings unless the parties simply produce the Mickey Mouse policies that I described before.

Imagine, from opposition, trying to model the budget impacts of serious welfare reforms to reduce effective marginal tax rates and to increase the incentive to move people from welfare to work. These are the types of reforms that are often talked about but rarely seriously pursued. From opposition, during an election campaign, the risk to your political campaign, frankly, would currently be too great to bear. It would be too risky to pursue that type of very complex reform where the impact is not just on the welfare benefits that are paid out but on the tax receipts that government has and on money that might be spent on programs to assist people in that transition from welfare to work. They are complex policies. So all political parties find it far easier to propose a capped back-to-work program grant targeted to a limited number of recipients instead of the fundamental structural reforms that we should be talking about far more often in this place, and particularly in the public arena during election campaigns.

I would argue that experience with programs like Green Loans and the cash-for-clunkers scheme dramatically strengthens the case for establishing a strong, independent and confidential Parliamentary Budget Office. As I indicated, such a proposal was mooted by Malcolm Turnbull in 2009 and taken to the 2010 election by Tony Abbott. It has been embraced by the Independents in their negotiations thereafter, and I am pleased that the Labor Party and the Greens came to the party and accepted it as a good proposal. A good Parliamentary Budget Office has the potential to provide independent costings to all parties—to backbenchers, Independents and crossbenchers, not just to party leaders and the leadership machine. Although such costings will not be bullet proof, because, as I said before, even the costings of Treasury are far from bullet proof, they should provide sufficient armour to the parties pursuing those costings to encourage greater bravery in policy development and to encourage people to pursue real and complex reforms, even from the opposition benches, the crossbenches and even—dare I say it—from the backbenches of opposition or potentially of government.

If we get this right, it may well be that future party leaders will rue the day this legislation was passed because ambitious backbenchers will be able to get complex policy reform proposals costed and argue the case with evidence to help back them up. Most importantly, if we get this right, we may, in future debates—especially in future election campaigns—get to debate ideas themselves instead of simply being bogged down in debates about whether the costings underlying such ideas hold up or simply stack up.

Unfortunately, there was little in the final deal struck with the Independents that will leave a positive mark or a positive legacy on our body politic—but this had the potential to be it. Equally unfortunately, though, there was little in that deal that outlined the detail of how such a Parliamentary Budget Office should or would work. Regrettably, now we come to debate the legislation before us, we see that it fails in the detail to achieve the lofty aims that we should be striving for in the type of reform we want to achieve.

Most critical in this, and it has been raised by all the other speakers and it is tackled in Senator Cormann's amendments which he moved on behalf of the coalition, is this issue of confidentiality. When you are making policy, when you are trying to consider policy options and when you want to get those policy options costed, it is essential that the information is treated in a confidential way because you may not choose to go ahead with it. Once modelled, once you get the costings back, political parties may look at it and say, 'The cost of this measure is too great.' Frankly, isn't that what we want out of this proposal? Isn't it that, when informed of the cost of some policy measures, we want political parties to rule them out, to say the cost is too great and therefore to not proceed. Under this legislation there is a risk that such proposals would then be made public and that the political party which internally had decided not to pursue a certain policy option, had decided that they were not going to go ahead with it, would then be faced with publicly having to justify why they were considering it in the first place. They would be faced with the newspaper headlines of 'Coalition considers' or 'Labor considers' or 'Greens consider XYZ', and the huge budget cost that comes with it. That, of course, would mean that parties would be less likely to use the services of this Parliamentary Budget Office. That would undermine greatly what you would hope to achieve from it.

The government of the day, when it comes to the release of information, often relies on a clause in the freedom of information laws that relates to deliberative matters. When the government of the day, working through Treasury, is getting policy options costed, the opposition, the media or others may go along and make FOI applications to try to see what the government is doing or considering. Frequently you get a response to the freedom of information request—I know this because I receive them often—saying they will not release this information under the clauses of the FOI laws that relate to 'impact on deliberative considerations', matters that are under deliberation, the fact that the government is still making up its mind.

The same really should apply here. If a party chooses not to go ahead with a policy then it should never be made public unless that party chooses to make it so themselves. That would seem to me to be a core and fundamental aspect. I would urge those on the crossbench in particular to think sensibly about the benefits that could be had if we get this legislation right, to think about it with clear eyes, to think about it in the real world of politics, where some things have to remain confidential. Sometimes good ideas do not turn out to be that good after all and so you ditch them. In that world, you do not want those ditched ideas to drag you down during a campaign—and nor should they, because you have made a rational decision, once informed by all of the facts, to cast them aside.

Senator Cormann is pursuing a range of sound amendments that deal with the concern about confidentiality that I highlighted. His amendments also deal with the powers the Parliamentary Budget Office will need to be able to get information out of government, empowering it to effectively advise on policies and costings and ensuring that its functions allow it to consider, have regard to and develop proper economic forecasting and budget estimates—the types of things that we should want from this.

I appeal to the crossbenchers, to the Greens in particular but also to the government: have lofty ambitions for this. This legislation could have the potential to change the way our debates around politics work in this country. It could allow us to debate good policy, good ideas, real reforms and radical reforms in the future, rather than be dogged by mickey mouse policies and election campaigns that, frankly, are all too often meaningless and do not achieve the types of reforms we should be considering in this country. Adopt Senator Cormann's amendments. Support Senator Cormann's amendments. We have the potential to get a great deal out of this, to have an effective Parliamentary Budget Office that can work for the benefit of politics and raise the standard to a level that I believe all Australians would welcome. That is what you should do. The challenge lies with all of those opposite. (Time expired)

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

It is a pleasure to follow Senator Birmingham in this debate. I would like to make a number of points. I have had some experience with budget offices overseas, having visited the Canadian budget office last year and having learnt from the development of that budget office and the way its role has slightly changed over time. I will go into that shortly.

Senator Birmingham referred to the sorts of debates we have in Australia during our election campaigns. One of the things about Australian election campaigns and Australian politics when compared with those of many other Western democracies is the focus upon economics. There are few other democracies that have as extensive a consideration of the cost of policy initiatives. Senator Birmingham quite rightly referred to the problem now of fighting over the policy costings, but that is a reflection of a recent trend that in itself is actually quite positive. Too many countries around the world are in trouble today because they have not focused on the costs of policies and initiatives. Political parties have had abstract ideas without trying to communicate to the people what the cost of those policies may be, and the electorate is no better off for that in the long run. The Australian electorate has in fact been very well served by the two major parties over the last 30 years and by a political debate that has always tried to ensure, at least on this side of the chamber, that the cost of a policy or initiative is outlined.

What has happened of late is that we have started to debate what the cost of a policy might be rather than having competing policies, competing for the use of limited government resources. That is a reflection of the increasing professionalisation of politics, for lack of a better way of putting it. Costing policies is now increasingly resource intensive. It is not something that can easily be done outside the resources of the Treasury and the Department of Finance and Deregulation. That is a challenge that has existed for oppositions all through the Western world.

What this Parliamentary Service Amendment (Parliamentary Budget Office) Bill would do, with the incorporation of the amendments to be moved by Senator Cormann, is to start to redress that. It would take us back to a situation where the electorate would not be faced with people arguing over the cost of a particular policy as the government—particularly this government—tries to limit the flexibility of the opposition. That has been particularly the case under the current government, as it has sought to distract people from what it itself has been up to. This bill tries to give the electorate a real choice between competing uses of limited government resources. That is something that Australian politics has done quite well over the last few decades and it is something that western Europe and the United States would probably have benefited from. They might not have found themselves in the fiscal situation that they are in.

I am a firm believer that it has actually been the quality of political debate over most of the last 30 years in Australia that has put pressure upon governments to maintain responsible fiscal settings. While some economists and some parties that sit at the end of this chamber may complain about the previous government's focus upon the elimination of debt, we know that irresponsible government borrowing does not just ensure a happier day today and a short-term economic quick fix; it has massive penalties in the future. A dollar borrowed today is merely a dollar of tax deferred plus interest. So, when governments borrow amounts of money and when they are wasted and when they are spent irresponsibly, you do not eliminate the payback. You do not eliminate Judgment Day. You simply put it off. In western Europe, we are now seeing the true cost of that on a generation in a country like Spain, with unemployment at chronic levels of over 20 per cent generally and nearly 50 per cent, facing austerity regimes merely because governments have run up too much debt. That is a generational inequity.

The coalition strongly support the amendments to be moved by Senator Cormann. We have form in this regard. It was the coalition that introduced the Charter of Budget Honesty after the 1996 election, when the then Labor government did everything it could leading into the 1996 election to hide the true state of the books from the people—and there was no mechanism for the true state of the books to be made known. The coalition legislated that and it has informed our political debate ever since, but it has not kept up with the times.

The increasing need for serious resources to cost complex policies has meant that we do need to move with the times, and a real Parliamentary Budget Office is an important part of this. It is sad that the government has not lived up to these particular ideals. Several years ago, not long after I commenced in this place, when the opposition proposed a Parliamentary Budget Office, the idea was ignored and dismissed by the government. Yet, now, they come to us with an illusion of a Parliamentary Budget Office, as they do in so many other areas—the illusion of economic reform and the illusion of fiscal sustainability—in order to try to have a political quick fix with their partners in government down the end of this chamber and in the other place. This shows the double standards of the Greens with the government.

The release of requests for costings that apply to members of parliament under this proposed Parliamentary Budget Office, which we are seeking to amend, does not apply when the government seek different proposals to be costed by Treasury and the Department of Finance and Deregulation. I note the Greens' commitment to transparency has seemed to stop now that they have access to Treasury via their deal with the government. They are not as keen on transparency generally now. My colleagues speaking earlier outlined the outrageous situation of the guillotine being imposed on multiple unrelated bills every night that we sit in this place this week, and the farce of last night where at one point even the government did not know how it was voting on a bill and we nearly had to have a recommittal, and the question had to be put again.

Now that the Greens sit with the government, now that they have access to the Prime Minister more than most members of the government backbench, they are not as keen on transparency in debate. The carbon tax modelling details have not all been released because the government and their Greens allies do not want real scrutiny of that economic modelling. That is a pertinent point with regard to this bill, because this Parliamentary Budget Office is seriously curtailed in the activities it can undertake, because the government do not want serious scrutiny of their economic assumptions and modelling. Last night, we saw legislation passed in the lower house following a secret deal with the Greens in the dead of night. The House of Representatives was not informed about what the deal was. The member for Melbourne was on the television this morning saying, 'It's up to the government to release it.' If you are party to the deal, you can release it too. The Greens' commitment to transparency is nothing but a sham. They have access to Treasury through their deal with the Prime Minister.

There are problems with this bill in the sense that it does not create a truly independent source of advice for members of parliament. The memorandums of understanding that this bill institutes, as opposed to the rights to access information, which are incorporated in the amendments to be moved by Senator Cormann, ensure that the information that the Parliamentary Budget Office can have is really at the whim of the executive. Those MOUs have to be undertaken by agreement, whereas a real Parliamentary Budget Office has access to all the information held by the department. If we look at the carbon tax modelling, this will mean that the government could refuse to release all the assumptions, as they are refusing to the Senate and the House of Representatives, that underpin the carbon tax modelling. Yet, under a Parliamentary Budget Office that we would seek to establish, that would not be available to the government to prevent the PBO having access to it.

The provisions about publishing requests are particularly pernicious. This is the fundamental flaw in the bill, in my view. The Parliamentary Budget Office should actually facilitate an iterative process. It should facilitate a process whereby members of parliament—parties, Independents and individual members—can seek to develop and refine ideas. I want members of parliament to understand the cost of the policies they propose. I understand that is not necessarily the case with the Greens, who prefer to propose ideas in the abstract. It used to be the case with the Labor Party in their previous iteration in government, at least for a few years when people like Senator Walsh were in this place, a trend I notice they seem to have lost.

This PBO should facilitate members of parliament developing an idea, seeking analysis of its cost, understanding that that might be more than the budget can afford and then seeking to reduce that or refine it to make it more targeted, to more effectively utilise limited public resources. But this PBO does not allow that. It seeks to publish all that information and destroy any capacity for a member of parliament to undertake that iterative process. I note that the same principles of disclosure do not apply to the government seeking such advice from Treasury or Finance. The government can seek to refine policies as often as it would like with the departments of Treasury and finance—and I understand now so can the Greens and the Independents. However, none of those details are released, none of those earlier assessments as they are attempting to refine policy are released—and I would not necessarily in all cases seek access to that information. Why on earth should people seeking to use the Parliamentary Budget Office have that information released as they attempt to develop and refine policy? There has been no justification and no explanation for this particular provision.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Madam Acting Deputy President, I rise on a point of order. I draw the attention of Senator Ryan to the bill, because everything he is saying is actually untrue.

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

Madam Acting Deputy President, on the point of order: Senator Ryan is very clearly and very eloquently addressing the bill before the chamber. There is no point of order and I recommend you rule that way.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

I will be ruling that way, not Senator Milne, Senator Cormann. Senator Ryan, I draw your attention to the bill and I ask you to continue your contribution.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

I am, respectfully, not sure how I could be more relevant to the bill. I detect a touch of sensitivity from that particular corner of the chamber in Senator Milne. The point that I was outlining is that the opposition wants to allow the PBO the same iterative process and the same confidential process of developing and refining policy without its release to the public as is available to the government of the day—and, Senator Milne, as I understand it, as is available to the Greens via your deal with the government of the day. I remember the day, Senator Milne, when the Greens used to care about members of parliament having some degree of autonomy. That process is at the core of the flaws in this bill. It is not something that applies to the Parliamentary Library. The Parliamentary Library has confidentiality provisions that protect the work between members and the Parliamentary Library. The release of information by the PBO during the election period undermines that.

Secondly, the Parliamentary Budget Office proposed in this bill by the government, the Greens and the Independents is specifically precluded from developing alternative economic forecasts, whether that be at the whole-of-budget level or at the program level. Again, there is no justification for this. I am in favour of competition but it seems like the government does not want any competition in economic forecasting. Given this government's record since it took office four years ago, I think a bit of competition might improve its performance. I do not see why there is no provision for the PBO to question the assumptions in government forecasts and come up with its own. We would have benefited from that during the first stimulus package. Maybe, just maybe, the government and the Greens might have listened to a PBO that outlined that the pink batts program was going to blow out or that, as Senator Birmingham said, the Green Loans program was going to blow out. But the government does not want to see these assumptions challenged.

Overseas, the Canadian Parliamentary Budget Office does put out alternative forecasts, and it does ensure that the papers put out by the Treasurer and the finance minister are not able to be completely unchallenged. We have lots of economists in Australia who challenge the government's forecasts. I do not see why we should have only Access Economics doing it rather than the Parliamentary Budget Office. More particularly, why is it prohibited at a program or agency level? Why can we not have alternative forecasts of programs? It seems that the government, again, is running away from real competition in this regard.

My visit to the Canadian Parliamentary Budget Office last year was very informative. One of the most important things they outlined was that there did need to be a degree of confidentiality to ensure that members of parliament could have an iterative process of developing and refining policy. More important is the ability to access information. Every budget office, whether it is a CBO or a PBO in a Westminster-style parliament, has had challenges in accessing information because Treasury and Finance or whatever they are called in various countries do like to protect their patch. They are not as in favour of competition when it comes to economic forecasting as they might be, for example, in the dairy industry, Senator Williams.

Competition in all regards is good, and in this regard in particular we should be empowering the Parliamentary Budget Office to get that information, absent an MOU, so it can get this information out to parliamentarians and, through them, to the people. A Parliamentary Budget Office should be, as it was put to me, a 'decision aid' for members of parliament. It should inform parliamentary debate and public debate about the opportunity cost of not doing something or initiating a particular policy. Our country would be a lot better off if there were more of this and less debate over costings, as Senator Birmingham outlined.

The government is seeking to nobble the PBO and ensure that it does not fulfil that purpose, to create this illusion that there is some source of advice but then to set it up in such a way that it cannot be used by the opposition of the day or any minor parties who are not part of the deal with the government.

This should have been a day when the parliament was particularly pleased about instituting a new process that informed debate for the public and for us, that added to transparency and that heightened the level of economic debate in this country, which is so critical. Absent the amendments to be moved by Senator Cormann, it is sad that today will not be that day. I urge the Senate to consider those amendments and ensure that we deliver this Parliamentary Budget Office and meet those objectives we set out earlier.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

In the few minutes I have before this debate on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011 concludes prior to question time, I would like to reiterate the sense that Senator Ryan just suggested. To those listening to this broadcast: a great many members of the Australian public must be saying, 'Hallelujah! There is some common sense creeping back into the legislative agenda of this parliament.' That is what this bill is about. It is about removing the sticking points and the partisan nature of parliamentary commitments prior to an election so that there can be no dispute about the independence or the veracity of the claims that are made.

It was certainly an initiative of the coalition; that is something to recognise immediately. To the government's credit, they saw that it was a good idea and thought it should be implemented of their own accord. So we have two competing bills. The difference is that the coalition has a purer version of this, a version in which the Parliamentary Budget Office is truly independent and not simply annexed to the coat-tails of Treasury and, subsequently, the government. That is the reason for the excellent amendments to be put forward by Senator Cormann to the government's bill.

There are a number of key differences. I have only a couple of moments, but one of the important differences in the government's position is that the Parliamentary Budget Office will be an extension of the Treasury and the Department of Finance and Deregulation, whereas under the coalition and under our proposed amendments the Parliamentary Budget Office will be an independent statutory body. It will also be able to put forward economic forecasts, as Senator Ryan and Senator Birmingham said earlier. Under the government's policy agenda, it will not be able to do so. It will not be able to offer a competing contrast.

I, like many of the people in this place and many Australians, am somewhat dubious about economic forecasts that are put out to support government positions. I say that based on experience. Almost without fail, they fail to meet the expectations or they fail to be correct. It is often said to me, 'When the Treasury or the government can predict exactly what the surplus or the deficit under this government is going to be then we can accept their forecasts in other areas.' But we know that is not the case because constantly there is paper shuffling and juggling. What I would say is that we need a return to integrity, we need a return to common sense and we need a return to accountability. That can be achieved through the Parliamentary Budget Office, but only if the amendments to be put forward by the coalition are adopted by this government.

Debate interrupted.