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Monday, 12 September 2011
Page: 9632


Mr BRIGGS (Mayo) (16:07): I enjoy following the member for Petrie and her contributions to this place and working with her on the Joint Committee of Public Accounts and Audit. But I will just bring her up on a couple of points that she made in her contribution to the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011. She made the point at the end of her contribution about the Charter of Budget Honesty and black holes. Of course, that was born of the great, famous Labor black hole from the 1996 election campaign, when the former Labor government did not tell the truth about the state of the budget leading into the 1996 election campaign, leading to the need for specific legislation to deal with the dishonesty of the former Labor government and to ensure that an opposition coming in to government would at least know before an election what numbers they might be dealing with, rather than being faced with a $10 billion black hole following an election, as the Howard-Costello team were when they were elected in 1996—as colleagues on this side of the chamber well remember.

The member makes an interesting point when referring back to former Treasurer Peter Costello and trying to make the political point that the Labor Party are somehow the holders of all virtue when it comes to pre-election costings of their policies. It was not so in government up until 1996, and it certainly was not so when they were in opposition.

This is an extremely important bill for the well-functioning operation of our democracy. It is very difficult on the opposition side of the chamber to undertake and develop significant policy reform in this country without understanding the fiscal costs of the policies. There is no doubt about that. I see the shadow minister for the environment sitting at the table. He of course has a very significant responsibility in a difficult area, and it is only fair and right that he, like other members of this place on this side, should have access to detailed and comprehensive information relating to the policies being considered for putting before the Australian people.

If we want to put the reforms into place in this country which will help our next generation and will help us all achieve what we wish—which is to leave this place in better shape than what we found it—we should be arming MPs on all sides with the tools to be able to do so, in my view. Such a reform was announced by the former Leader of the Opposition in a budget-in-reply speech some time ago. That reform is long past being necessary—it is now time for it to be enacted. It is a pity that it has taken the opposition moving a private member's bill in this place today for the government to finally get its act into gear. It has been a long time waiting for this bill, and the one we see before us today is a flawed version of what it should have been. Fundamentally and essentially what a parliamentary budget office should be able to do is provide independent and genuine third-party analysis of the fiscal impact of parties' policies, not just leading into an election campaign, in a caretaker period, but during the term.

The media and the general public are increasingly demanding, particularly right now, that those of us engaged in the policy debate begin to outline how we think the economic future and wellbeing of our country will be managed. That is an important debate for us to have, and it is an important duty of an opposition to outline its alternative. It is not possible to outline your alternative in a genuine, detailed fashion if you do not have the numbers—the advice, such as economic projections and modelling of the impact of your policies.

A political game is played on budget costings in this country in election campaigns, and we all partake in it. It happens at the federal level and at the state level. Inevitably, incoming governments find black holes. Inevitably, outgoing governments claim they are not there. People in general shake their heads in bewilderment. But if we want to have a stronger policies, if we want to have more discussion about necessary reforms—and I think right now we are at the beginning of a period where we are going to need substantial reforms to remain competitive in our country—we need the tools in this place to be able to operate effectively as members of parliament, as oppositions, as Independent members of parliament and as third parties, as well as the executive of government.

The executive of government has the high-quality tools available to it to do that job. We know the Treasury department is full of very competent, very smart people who understand the budget and the impact of fiscal policy very well. They do not always get it right, it must be said. Many times their projections are off; they are either short or long on the projections for revenue or expenditure—which is to be expected in a budget of some $350 billion. It is right and proper for a government to engage with its Treasury department, with its finance department, to get advice on policies that they are considering implementing through the executive process of government.

But, equally, it makes sense for oppositions to be doing the same with policy development. You do not get these things right at first blush; you need to go back and reconsider, to look at numbers and impacts. Things change. Numbers change. Forecasts come out half yearly about fiscal numbers and impacts of policies. So it is right that oppositions should be able to engage with an independent budget office and get the best information available and the best policies to present to the Australian public—because, ultimately, that is in all of our interests.

So the provision in this bill to take away confidentiality of requests for members of parliament when it is in caretaker mode is nothing but short-term politics by a government who desperately want to use the politics costing at the next election campaign without thinking through the impact it will have on their own political organisation when they will inevitably go into opposition in some stage in the future.

Reflecting upon this debate prior to speaking today, I was drawn to something that the shadow Treasurer and member for North Sydney made a reference to earlier, and that is that each of us in this place, on the Labor side and on the Liberal side, try and make it harder for the opposition—no doubt about that. I notice that Senator Nick Sherry, when he was Deputy Leader of the Opposition in the Senate when Peter Costello first moved the Charter of Budget Honesty, said:

The pre-election costings regime is … deficient in a number of respects … Only costings of previously announced policies is allowed—that is, policy decisions would have to be made on the basis of incomplete information and be announced.

That is exactly what the Labor Party is seeking to do with this bill, in that they are refusing confidentiality during an election campaign for their own political purposes—as if all policies are held in perpetuity, as if things do not change. They want to release all the information, even if it is a policy that you decide not to proceed with because maybe the information you have got from the Parliamentary Budget Office tells you you cannot afford to do it this time. In the future, with at least the next election campaign and most probably the ones post that, we will have policies from both major parties, I presume—certainly from our side—which will be about reducing the expenditure of government. They will be about reducing how much the government spend on programs. They will be not so much about more expenditure and spending promises, as we have seen in election campaigns in recent history. With the Greens, of course, we will have a whole series of policies which will spend a lot of money. It will be fascinating to see if the Parliamentary Budget Office can even estimate how much money some of their policies will actually cost.

Mr Fletcher: There may not be enough zeros.

Mr BRIGGS: There may not be enough zeros and there will certainly not be enough ink in the money-printing machine at the Reserve Bank to keep up with what the Greens would like to do with the Australian budget. But, equally, I think that we should enshrine in this place the right of the Greens to get advice on their policies—and we should have done so by now.

This bill is flawed, however, and there are very good proposals by the member for North Sydney on how we can improve this bill. They are simple amendments which do three important things in the main, if we go back to the fundamentals of why we want a parliamentary budget office in the first place. The first area is to strengthen the functions of the PBO. I quote: 'These amendments seek to broaden the functions of the PBO to include preparations of economic forecasts and budget estimates. This will essentially broaden the scope of the PBO.'

Of course the Parliamentary Budget Office needs to provide economic data to the opposition, to the Independent members, and even to the Greens, on the state of the economy, on the impact to the budget of different decisions and different plans and the impact of decisions made by the Reserve Bank—because they are rightfully respected as an independent institution. These are all decisions which should be made on the best advice available. I think we all agree on that. The government's bill is flawed because it does not give the PBO enough room, enough scope, in that respect.

The second amendment by which we seek to improve this bill is to improve information-gathering powers and secrecy. Our amendments will strengthen the information-gathering powers of the government's bill and affirm the independence of the PBO. How can they get the information to do their job? If you have got a health policy with significant expenditure off the Commonwealth budget, and which will have big impacts on your fiscal decisions, the PBO must have the power to go to the health department and get the relevant information. It is quite clear and simple. If it is to be an independent and effective and genuine third-party analysis, that is an absolute requirement—it is a must. In that respect, this is a very good amendment being proposed by the member for North Sydney.

The government's bill requires the PBO to establish memorandums of understanding with every government department and agency. The PBO has no leverage over these agencies and departments and therefore it may compromise the PBO's access to the most up-to-date information for the costings of these policies. At the end of the day, we in this parliament should be the masters of our own destiny. I have heard the member for Lyne, who is in the chamber, talk about the sanctity of the member of parliament. If we are going to encourage this right and ensure this right—not only for the executive of the government but also for members of parliament, the Parliamentary Budget Office needs to have the powers so that they can do so. I say to the Labor Party: if you really think, 'This is a good idea in government,' think about it as if you were in opposition, because the wheel does turn in Australian politics, and rightly. It is a good thing that governments change from time to time, because it brings about a new generation of thinking and leaders. It has not been so great for the country since 2007, but that is the decision of the Australian people. Ultimately the powers that will be enshrined in this legislation will be for all of us into the future. With this bill we should be trying to put aside, as much as we can, the partisan nature of the politics of costings, and think about how we as political organisations can get the best available information so that we can put it to the Australian people.

The third area where we seek to improve this bill in a substantial way is by restoring the confidentiality to costings policies during and after the caretaker period. That is the point I was reflecting upon before. If you take away that confidentiality and you just plaster it all up on the internet, it is not something that you are doing to the executive. The executive will not be required to publish the considerations of the policies that they may be thinking about prior to an election. If you were intending to take to an election a tax cut which has a major fiscal impact over a long period of time, and if you are seeking this detailed information, and you put different scenarios to the Parliamentary Budget Office—like the government does with Treasury and Finance—that information would obviously show quite large differences, depending on the percentage cut that you wanted to offer. If that information or advice is not going to be confidential—whether it is given to the member for Lyne as an Independent or to an opposition party, or even the Greens—we should not participate in it. Why would you allow the potential situation where the other side of politics could use the information as a tool for their political quests rather than a genuine effort by elected members of parliament to try to find the right reform mix for the future?

This is a good idea. This is an idea which is well over its time. The former Leader of the Opposition, the member for Wentworth, first proposed this. It is not a new idea. It happens in the United States with the Congressional Budget Office. I am pleased that the Independents in their negotiations put emphasis on this idea, and I think it is something we should be putting in place. But this is flawed in three significant ways, and we can improve this bill. We can improve it not just for those of us who are currently occupying the seats that we do in the parliament but for all the Australian people and for the benefit of decent economic reform for our country for the future. I urge the government to think about, to take on board and to consider the amendments we have put in place, because they are good amendments to what is a good piece of legislation.