Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I present the government's response to the 446th report of the Joint Committee of Public Accounts and Audit, the Review of the operations of the Parliamentary Budget Office. In accordance with the usual practice, I seek leave to incorporate the document in Hansard.

Leave granted.

The document read as follows—

Australian Government response to the Joint Committee of Public Accounts and Audit Report No. 446

Review of the Operations of the Parliamentary Budget Office

JUNE 2015

Response to the recommendation(s)

Recommendation No. 1

The committee recommends that the Government ensures that Commonwealth agencies meet the timelines in response to a request from the Parliamentary Budget Officer as specified in the Memorandum of Understanding.

Noted

The Government acknowledges the importance of timely responses by Commonwealth entities to Parliamentary Budget Office requests. At the same time, the Government notes it is important that the deadlines requested by the Parliamentary Budget Officer, where possible, take account of the complexity of the request. Each entity is responsible for managing its own timeframes for responding to requests from the Parliamentary Budget Officer.

The Memorandum of Understanding (MOU) provides that, subject to/depending on complexity, urgent requests are to be responded to within 5 days of receipt, and routine requests are to be responded to within 10 days of receipt (paragraph 5.2 (d)). The MOU also expressly provides for negotiation of alternative timeframes (including seeking an extension of time to complete the request) based on the complexity of the request, the level of involvement of other agencies, and competing workload pressures.

Recommendation No. 2

The committee recommends that the legal authority of the Parliamentary Budget Officer should be strengthened by specifying the information gathering powers of the Parliamentary Budget Officer in the Parliamentary Service Act 1999. The Government should bring forward amendments to the Parliamentary Service Act 1999 to express the intention of Parliament that the Parliamentary Budget Officer is entitled to free and timely access to all relevant information held by Executive agencies required to perform his or her functions, except where it is unlawful to do so.

Noted

The Government supports the position that the Parliamentary Budget Officer is entitled to appropriate and timely access, noting that sufficient access to information from Commonwealth bodies is expressly provided for in the existing Parliamentary Service Act 1999 .

Recommendation No. 3

The committee recommends that the Government release details of the individual components of the Contingency Reserve to the Parliamentary Budget Officer, subject to any non-disclosure requirements considered necessary.

Not supported

As noted in the Department of Finance's (Finance) submission to the Joint Committee of Public Accounts and Audit (the Committee), disclosing individual line items in the Contingency Reserve (CR) would be contrary to the public interest.

Finance publishes the aggregate estimates for the CR, together with a broad description of the CR, in the Expenses and Net Capital Investment Statement, which in the 2015-16 Budget is Statement 5 of Budget Paper 1 and Attachment D of the Mid-Year Economic and Fiscal Outlook, and where appropriate, in the Pre-Election Economic and Fiscal Outlook.

Individual measures in Budget Paper 2 may include a statement that a provision has been included in the CR where the financial implications cannot be published due to commercial sensitivity, national security or where the disclosure would disadvantage the Commonwealth (such as in the negotiation of National Partnership Agreements).

Given the sensitivity of some information and the potential harm to the Commonwealth's interests, as well as to national security, Finance relies on exemptions that are available under the Freedom of Information Act 1982 to exempt such information from release or disclosure.

Recommendation No. 4

The committee recommends that where a Commonwealth agency outsources the preparation of the budget estimates and costing of policy proposals to a third party, the terms of the contract should enable the agency or the third party to provide all the relevant data, including the underlying calculations, models and methodology, to the Parliamentary Budget officer under the MoU without charge.

Support in part

The Government notes that the Australian Government Protocols Governing the Engagement between Commonwealth Bodies and the Parliamentary Budget Officer expressly state that in determining whether information will be released to the PBO, Commonwealth bodies respect and recognise pre-existing intellectual property of any information they hold and/or use that has originally been produced by third parties.

The MOU also provides for free access to relevant and accurate information from Commonwealth bodies, but that specific arrangements may need to be negotiated between the parties to obtain information held under license (paragraph 5.4).

The Government also notes that situations may arise where an entity has to pay additional fees or charges to access data it does not already retain and/or is not already in its possession. In these circumstances, the Government considers it reasonable for entities to pass these additional costs on to the PBO.

Where the preparation of budget estimates and/or costing of policy proposals are outsourced by a Commonwealth agency, the Government expects that these arrangements should be contracted to provide for independent scrutiny by Finance, and notes that these arrangements could extend to the PBO as well.

The Government is therefore supportive of entities considering the inclusion of clauses that enable sharing of data with the PBO, subject to pre-existing intellectual property rights, and as contracts come up for renegotiation.

Recommendation No. 5

The committee recommends that the Government review Commonwealth statutes and remove legislative barriers to the release of information to the Parliamentary Budget Officer, including those identified in this report.

Noted

The Government is committed to protecting individual privacy and the confidentiality of data provided to the PBO, noting there are a range of provisions contained in Commonwealth legislation that specifically deal with the protection, handling and transfer of sensitive information, particularly personal information.

The Government further notes that, as indicated in the PBO's submission to the Committee, to date legislative barriers have had very little impact on the PBO's ability to respond to requests of parliamentarians. The nature of the PBO's requests for information have focused on summary data and agencies' models.

Recommendation No. 6

The committee recommends that where it is appropriate to retain an administrative discretion, the Government should consider making special provision for the release of data to the Parliamentary Budget Officer and, if necessary, any additional protection for the Commonwealth decision maker.

Support

The Government notes the PBO's claim in its submission to the Committee that there have been some instances where legislative provisions have either prevented or delayed the PBO's access to detailed information and models, including where the provision of information to the PBO requires the exercise of a discretionary power by the Agency Head.

In circumstances where sound reasons exist for non-release of information, (for example, commercial, or cabinet in-confidence or intellectual property rights) the Government supports Agency Heads exercising their discretion in deciding the most appropriate approach for their entity.

Should significant barriers emerge, the Government would consider additional protection for Commonwealth decision makers, in prescribed circumstances.

Recommendation No. 7

The committee recommends that the Parliamentary Budget Officer should prepare and publish medium term projections on an annual basis. The Government should bring forward the necessary amendment to section 64E of the Parliamentary Service Act 1999 to include the annual preparation of medium term projections as a core function of the Parliamentary Budget Officer.

The Parliamentary Budget Officer should be consulted, and if required, the Government should provide additional resources to enable the Parliamentary Budget Officer to carry out the new function.

Support in part

The Government supports the PBO periodically reporting and publishing medium term projections of programme expenditure on an ad hoc basis, which can be done under existing legislation.

Section 64E(1)(c) of the Parliamentary Service Act 1999 provides for the preparation of responses to requests relating to the budget, which could broadly include the PBO undertaking medium term projections of programme expenditure. Section 64E(2)(a) expressly states that the PBO's functions do not include preparing economic forecasts or budget estimates.

The Government notes that the difference between medium term projections of programme expenditure and the preparation of economic forecasts and budget estimates is that medium term projections represent extensions beyond the forward estimates (based on assumptions made by the PBO) of published government policies and spending provided by other government entities.

The Government also notes that the PBO has previously undertaken this activity, which was published on 22 August 2014, titled 'Projections of Government spending over the medium term' within its existing resources. Should the PBO consider there is a case for additional resources, it should seek to bring forward a New Policy Proposal, consistent with the process applied to all Commonwealth entities when requesting additional funds.

Further, the Government notes that the Treasury already publishes medium-term projections of key fiscal aggregates (including underlying cash balance, and gross and net debt) each year in the Budget and Mid-Year Economic and Fiscal Outlook. Presentation of these medium-term projections as part of a document where the primary focus remains on the four-year forward estimates period has benefits. Such an approach sensibly balances the need to illustrate the broad medium-term trends in spending and revenue implicit in current policy settings, on the one hand, against the unavoidable decrease in precision involved in fiscal estimates as the projection horizon increases.

Recommendation No. 8

The committee recommends that the Government bring forward amendments to the Parliamentary Service Act 1999, to extend the analysis in the post-election report beyond the period of 4 years (current financial year and 3 year forward estimates) to include, where possible, 10 year medium term projections of the budget impact of the election commitments of the designated parliamentary parties.

The committee recommends that the Government consult the Parliamentary Budget Officer about the timing and detail of the information required on which to base the analysis.

Noted

Consistent with the Charter of Budget Honesty Act 1998 the Government employs a medium term estimates framework, and costings are done on the basis of the budget year and the following three financial years.

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

I rise to note the government's response to this report of the Joint Committee of Public Accounts and Audit on the review of the operations of the Parliamentary Budget Office. I have to say that I am very disappointed with the government's response. The Parliamentary Budget Office has been an outstanding new institution to the federal parliament. Until we had the Parliamentary Budget Office the government of the day had a huge advantage over the opposition parties in that the government of the day would prepare its own costings for its election and could make comment on opposition costings, and we had no capacity to present carefully costed policy material that was all based on the same assumptions and modelling information, so that there could be a genuine debate about the policy propositions being put forward.

The Greens are very proud of the fact that we now have a Parliamentary Budget Office. This is something that we negotiated as part of the agreement between the Greens and the Gillard government—that we would pursue a parliamentary budget office. It has been pursued, it has been a great success and it stands as one of the institutions that has improved the operation of the federal parliament for the benefit of the community, particularly when it comes to election time and when it comes to looking at and talking about what the projections are over the forward estimates and beyond.

I want to say, though, that I am very disappointed with the government's response. The committee recommended there be several legislative changes to entrench, first of all, the legal authority of the Parliamentary Budget Office. It should be strengthened, and the committee gave a specific recommendation about an amendment to the Parliamentary Service Act to express the intention of parliament that the Parliamentary Budget Officer be entitled to free and timely access to all relevant information held by executive agencies required to perform his or her functions, except where it is unlawful to do so. All the government has done is note that. It has not accepted the recommendation that the legislation should be strengthened.

In exactly the same way, the committee recommended that the government release details of the individual components of the contingency reserve to the Parliamentary Budget Officer, subject to any non-disclosure requirement considered necessary, and—what a surprise!—the government do not support that. This prevents the Parliamentary Budget Office doing what it needs to do, which is to have a look at the details of the contingency reserve. Why have the government said it is not supported? They say that they do not believe it can be published due to commercial sensitivity and national security and that the disclosure would disadvantage the Commonwealth. Once again, the sensitivity of the information means we cannot get a handle, as opposition parties, on the details of the contingency reserve. What we are now seeing increasingly from this government is 'national security', two words that are used constantly to deny the community access to the information the community needs to make good judgements about government policy.

Again, the committee recommended that, where the Commonwealth outsources the preparation of the budget estimates and costings of policy proposals to a third party, the terms of the contract should enable the agency or the third party to provide all the relevant data, including the underlying calculations, models and methodology, to the Parliamentary Budget Office under the memorandum of understanding without charge. The government has only agreed to that in part. Once again, it is going to be those costs within a very restricted budget of the Parliamentary Budget Office that will prevent it from being able to access the information that government agencies have already paid to get from an external source.

We will go on looking at the recommendations. The committee recommended very strongly that the government review the Commonwealth statutes and remove legislative barriers to the release of information to the Parliamentary Budget Office, including those listed in this report. All that has been done is to note that. There is no move to carry out that legislative change. The same thing goes when it comes to the recommendation that the Parliamentary Budget Office should prepare and publish medium-term projections on an annual basis. Once again, it is only supported in part.

The point that I want to make is that the government is still disadvantaging the community by continuing to restrict what the Parliamentary Budget Office can get hold of and then provide in its assessment of those medium-term forecasts. Given the way that we have seen the government present the figures to date, this is a really important issue if we are going to get a handle on what the government is actually doing, recalling that last year there was a budget emergency and this year the budget emergency just evaporated. The whole assumption around that remain what the government chooses to present, and the analysis from the Parliamentary Budget Office is constrained by virtue of not having access to the information that it wants to have.

The last recommendation of the committee was that the government bring forward amendments to the Parliamentary Service Act to extend the analysis in the post-election report beyond the period of four years to include, where possible, 10-year medium-term projections of the budget impact of the election commitments of the designated parliamentary parties. This is really important because when a party goes to the election and says, 'Over the forward estimates we'll spend X, but we are going to introduce some new policy with regard to funding education, funding health, funding something else,' but they only provide the costs over the forward estimates and not what it is going to cost over the period of 10 years that they are saying, as a community we need to know that cost, otherwise it is a joke. We had this with the Gonski public funding of education. People thought there had been an undertaking from the previous government to pay for public education. But it was only over the forward estimates. The rest was pushed out to years 5 and 6, which do not exist in terms of providing money or real expectations.

The Parliamentary Budget Office should be able to scrutinise what is being promised in real terms over the forward estimates and what is on the never-never, out to the 10-year mark. What has the government's response to that been? It has just been: consistent with the Charter of Budget Honesty, the government employs a medium-term estimate framework, and costings are done on the basis of the budget year and the following three financial years. In other words, take a running jump, Parliamentary Budget Office; the government has no intention of carrying out that recommendation. That is a really short-sighted thing for the government to do. It is also ironic that the government should be saying 'consistent with the Charter of Budget Honesty', when it was the Abbott government, when in opposition, that completely ignored the Charter of Budget Honesty and did not provide a costed election platform when they went into the 2013 election, contrary to the Charter of Budget Honesty. The government sold that out.

The Greens went into the election with a fully costed platform. It was costed by the Parliamentary Budget Office, and it is something we are very proud of. It was the Liberal Party and the National Party, who pretend to be some sort of management of the economy, who went into the election without a fully costed platform. That stands as a matter of fact. When we go into the election next year, the Greens will be out there again with absolutely carefully costed policies from the Parliamentary Budget Office. Once again, it will be the government, through their failure to take up the recommendations of the committee to strengthen the legislative basis for the Parliamentary Budget Office to get timely access to information, that will be denying the community the information they need, through the PBO, to do what the community needs.

To conclude, I congratulate the Parliamentary Budget Office for the work that it does. It has been highly professional, and its work has been an important contribution to the parliament and to our democracy. It is something that I, as the former leader of the Greens, am very proud to have been able to implement whilst in the leadership, because it stands as a permanent contribution to the body politic and to democracy in Australia.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I want to speak to that same report. I will not take long. I want to simply highlight to those who might be listening that the speech they heard from the former leader of the Greens in this place was typical of her approach to matters in this chamber through all the time of her leadership—and that was that, if the Liberals did it, it is bad, and, if Labor or the Greens did it, it is good. Senator Milne did not highlight the fact that the Charter of Budget Honesty was an initiative of the Liberal government when Mr Costello was Treasurer. All of the accountability provisions that apply in this parliament are initiatives of Liberal-National Party governments over many years.

Senator Milne talks about costing of Greens election policies. With no disrespect to the Parliamentary Budget Office, which can only work on the material given to it by the Greens, anyone who saw that document would have had a good smile at it but would not have been encouraged to take on the Greens policies by anything the Parliamentary Budget Office might have done.

I remember several years ago one of their policies related to easier provision for some drugs around the place. This was before Senator Milne's time when Senator Bob Brown was the leader of the Greens. That was the first time anyone had had a good look at Greens policies. They were exposed, I think, by a Melbourne newspaper, which showed what the Greens election policies were all about. The coalition has always been open and frank with election policies— (Time expired)