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Monday, 12 September 2011
Page: 9652


Mr SECKER (BarkerOpposition Whip) (17:33): I rise to speak on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011. I think it is very interesting to look at the history of the idea of a parliamentary budget office bill. It was first brought to this parliament by the member for Wentworth after he studied what they had been doing in the United States and other places.

We took that to the election in 2010 as part of our policy. The policy was so good that the Independents, in their negotiations, thought it was a jolly good idea to have a parliamentary budget officer so that the parliament and members of the parliament could get a view of important policy that was backed by those minions in Treasury who can do the sums and can therefore be used in creating a more correct policy.

As a result of that we become party to the agreement to go ahead with the Parliamentary Services Amendment (Parliamentary Budget Officer) Bill, but after about 12 months of nothing happening the shadow Treasurer, the member for North Sydney, thought it was important enough that we should put it forward. And we did. Mr Hockey, the shadow Treasurer, introduced a private member's bill to establish a parliamentary budget office on behalf of the coalition on 22 August this year.

There must have been a flurry of activity in the Treasurer's office when he found out that he had been caught out in not bringing something forward. It should not take 12 months to bring something like this forward to the parliament. So, over the next two days, after a flurry of activity in the Treasurer's office—it is unfortunate that we have had to force this issue—the second reading of Mr Hockey's private member's bill happened this morning during private members' business. The coalition's Parliamentary Budget Office Bill of 2011 together with a Charter of Budget Honesty Amendment Bill 2011 will establish an independent PBO for the first time in Australia's history. This office will be a new body accountable to the parliament, not tied down to government departments.

The government decided it would introduce its own bill to establish a PBO and this happened on 24 August 2011, two days after the opposition introduced its own private member's bill, and now we have it here for debate today. So we have a situation where, two days after the coalition introduced their private member's bill to establish the PBO, the government have decided to put forward their own version of legislation to establish a parliamentary budget officer. Given the government has control of the timing in the House, the coalition now have to deal with the government's bill first, even though it was introduced second. We would obviously prefer to support the coalition's own private member's bill for the establishment of a PBO but, given the circumstances, we have put forward amendments to the government bill.

The coalition's private member's bill seeks to deal with the Charter of Budget Honesty legislation. The Charter of Budget Honesty was created by the Howard government. It was designed to ensure that a government could not mislead the public prior to an election about the state of the fiscal position. This was put in place following the misleading pre-election statements of the Keating government in 1996. The government's policy costing service under their PBO will be no different to that offered now under the Charter of Budget Honesty. I do remember that at the time that legislation was introduced to the parliament it was actually the Labor Party, then in opposition, who opposed it. How could any party oppose a charter of budget honesty?

The coalition's experience with the Charter of Budget Honesty has revealed some shortcomings. The service is not confidential—which we believe is extremely important—with requests for costings and costings of policies being published on the websites of Treasury and/or Finance as soon as they are received. Members of parliament have no control over the timing of the release of policies, and there is no scope for costings to be discussed or reviewed. For this reason, in its current form, the government's bill is inadequate. It does not address key issues and it is not in the best interests of the parliament.

This government has a poor track record with transparency: in 2007 and 2010 it released its full policy costings the day before the election. In 2010 the Treasurer did not even front the media after releasing a press release on the Friday afternoon before the election. Of course, in 2007 it gave no chance for those policies to be properly costed. Members opposite have been telling the House about the coalition's so called 'black hole' in costings during the 2010 election. The truth is that the coalition estimated the interest to be saved on the debt from not proceeding with the NBN by using, as we would consider normal practice, the Commonwealth 10-year bond rate as the discount rate. After the election it was revealed Treasury had used a different rate, a lower rate.

It is interesting that, later on, the NBN Implementation Study showed that the Commonwealth government bond rate was the appropriate rate to use for the cost of funds. So the government said that the Commonwealth bond rate was not the right rate when we costed it, but when they costed it it was the right rate. Go figure! The coalition was correct at the time and the government was wrong. This story unfortunately did not get the airtime that the 'black hole' story did.

There are a number of key differences between the government's legislation and the coalition's. I will go into some detail on those later but they centre around the functions, the powers and, most importantly, the confidentiality of the PBO.

As I previously said, the establishment of a PBO was a coalition election commitment. The establishment of a PBO was also a key element of the agreement between the government and the member for Lyne, the member for New England, the member for Denison and the Greens. There were several agreements between the Independents and the government which enabled the Prime Minister to form government, and this was one of them. This agreement formed part of the Agreement for a Better Parliament: Parliamentary Reform and stated that a PBO:

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

The Agreement for a Better Parliament further stated that 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.

On 23 March 2011, the government established a joint select committee on the proposed Parliamentary Budget Office, which subsequently recommended that a PBO be established. The funding for a PBO was provided for in the May 2011-12 budget. The amount was $24.9 million over four years. The government has chosen to amend existing acts in order to establish a parliamentary budget office

Schedule 1 amends the Parliamentary Service Act 1999. It establishes the PBO, including its purpose and functions and the PBO's access to information and oversight arrangements. It outlines employment conditions and arrangements for the Parliamentary Budget Officer and introduces a requirement for the Parliamentary Budget Officer to prepare an annual report, consistent with the Clerks of the Senate and House of Representatives and the Secretary of the Department of Parliamentary Services,

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 Guidance 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, amends the Remuneration Tribunal Act 1973 to ensure that this act encompasses the position of the Parliamentary Budget Officer, and amends the Long Service Leave (Commonwealth Employees) Act 1976 to ensure that this act encompasses the position of the officer. The key differences between the coalition's legislation and the government's are as follows. The coalition has made the conscious decision to ensure that the PBO be an independent body separate to that of the departments of Treasury and Finance. This means that the PBO will be an independent statutory body and the PBO will have strong powers to obtain information from government departments and agencies. Under this structure, the PBO will be able to provide analysis of economic forecasts and budget estimates. The government's bill deliberately ensures that the PBO functions as little more than an extension of the departments of Treasury and Finance by requiring the PBO to make an arrangement in writing to obtain information and documents and preventing the PBO from preparing economic forecasts and budget estimates.

The PBO established under the coalition would not be constrained by the MOUs put forward by government departments wishing to protect their positions or by agreements which stipulate what information the PBO may or may not have. The coalition's bill provides considerable information-gathering powers and secrecy for the PBO. The government's bill requires the PBO 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 Officer's functions—in other words, to agree to a memorandum of understanding.

The third difference in the two pieces of legislation is that the coalition's PBO is able to provide objective and impartial advice on the Commonwealth budget and budget cycle, including the impact of major policy announcements, while the government's bill, in contrast, specifically prevents the PBO 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, which says it is:

… the mandate of the PBO to inform the Parliament by providing independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals;

The last difference I would like to highlight relates to the confidentiality of policy costings. The coalition's PBO provides for complete confidentiality for all requests from MPs and senators. This allows non-government members and senators to engage in discussions with the PBO as well as allowing views to be challenged in a private domain. The PBO is not permitted to publish costings without the permission of the non-government member or senator. The policy costing options put forward in the government's PBO bill 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 requests as soon possible after receiving the request during a caretaker period and on or after polling day.

The government has certainly made it a lot harder for oppositions. It is providing less information and, frankly, it is a sham compared to what the coalition is putting forward for a parliamentary budget officer. (Time expired)