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Monday, 12 September 2011
Page: 9655

Mr TURNBULL (Wentworth) (17:48): The honourable member for Barker has made a comprehensive demolition of the government's legislation, so I will endeavour not to repeat too many of the points that he has made. But let me say right at the outset that the idea of having a parliamentary budget office—which, at least from the point of view of the coalition, was first proposed by me when I was Leader of the Opposition in the 2009 budget in reply—which is avowedly modelled on the United States Congressional Budget Office, was to address one of the very real weaknesses in our system of government. Nobody is suggesting—least of all me—that we should move to the American system. It has not been performing with great agility recently. But one of the weaknesses in the Westminster type of government is that the government by definition controls the lower house—sometimes more tenuously than others, as we see at the moment—and, because it is the government, has access to all of the massive resources of government in terms of economic analysis, financial information and so forth. And the opposition, which is meant to hold the government to account, is left with very little in the way of resources beyond the talents among its own ranks and perhaps the resources of the Parliamentary Library.

In the United States, where there is a clear distinction between the executive and the legislature—where the President is separately elected and then chooses all of the officials in the executive branch—the congress, which is completely separate, chose to establish the Congressional Budget Office may years ago. It is a very substantial institution with a budget of nearly $47 million a year, a staff of 250 people and an ability to provide a real counterweight in terms of economic and financial analysis to the work of the US Treasury and the various other economic departments on the executive side. That was seen as a critically important part of getting that balance of power right.

In our system, because the government by definition controls the House of Representatives and because the opposition is left with very little in the way of resources, all too often our ability to hold the government to account is very, very limited. Yes, we can ask questions through Senate estimates; we can also ask questions in the House. But, as somebody very wisely said, question time is called question time for a reason. It is not called answer time. The chances of getting an informative answer are not very great. The concept of a parliamentary budget office therefore is a very good one and it corrects an imbalance in our system of government. When I proposed this in 2009, the key motivation for my proposal, the immediate motivation, was the extraordinarily reckless spending of the then Rudd government, which in two years of panic reaction to the first and alleged inflation threat—remember there was a war against inflation—and then the global financial crisis had undone a decade of prudent fiscal management under the government of John Howard and Peter Costello as Treasurer. As I said at the time:

The alarming expansion of spending under Labor makes this—

a parliamentary budget office—

vitally important. Annual spending is projected to rise from $272 billion in 2007-08 to $342 billion in 2010-11, the largest three-year increase since the 1970s.

As we now know, the eventual expenditure figure for 2010-11 was even higher than forecast, at $350 billion.

That was the context in which I argued the case for a parliamentary budget office. But the case for it is now even stronger. We have seen the extraordinary spectacle of the NBN, the National Broadband Network, the largest and by far the most expensive infrastructure project in our country's history, being undertaken without any cost-benefit analysis and without any independent assessment of whether it is the fastest or most cost-effective way of delivering better broadband to all Australians. It is a gigantic project which will cost the taxpayer, were it to be completed, well over $50 billion, and was conceived not after rigorous financial analysis but conceived, so we understand, on the back of a napkin on a VIP flight between Sydney and Brisbane during the course of a conversation between the then Prime Minister, Mr Rudd, and the communications minister, Senator Conroy.

If we had a proper parliamentary budget office no doubt that would be a body that would be able to undertake an independent appraisal of this project and genuinely hold the government to account. Were a genuinely independent parliamentary budget office in existence, a government, before it undertook something as reckless as the NBN, would think twice because it would know that what it was proposing to do was likely to be assessed by that parliamentary budget office.

I was delighted that my successor as Leader of the Opposition, the member for Warringah, stuck with this policy proposal for a parliamentary budget office and took it as a commitment to the 2010 election. As we all know, that election resulted in a hung parliament and, in the wake of that poll, there were several controversies about the costing of various policies put forward by both sides. In that context, the establishment of an independent and properly funded parliamentary budget office became a key element of the agreement between the government and the member for Lyne, the member for New England and the member for Denison as well as the Greens.

On 23 March the government established a joint select committee to enquire into the proposed Parliamentary Budget Office, which subsequently recommended that a parliamentary budget office be established. Funding for the Parliamentary Budget Office was provided for in the budget, $25 million over four years, but a deafening silence and masterly inactivity then ensued. In the absence of any action from the government, on 22 August 2011 the shadow Treasurer introduced his own bill for the establishment of a parliamentary budget office. And then, as though struck by lightening, the government quickly responded and introduced its own bill into the parliament two days later. So there are two bills before the House to establish a parliamentary budget office. One of them establishes a parliamentary budget office which is genuinely independent and will genuinely provide the type of assistance that the policy objective requires. It is really to the difference between those two proposals that I will now turn.

The Parliamentary Budget Office established under the government's bill sets up the Parliamentary Budget Officer as an officer of the parliament, but it makes it, in practical terms, not much more than an extension or a branch of the departments of Treasury and Finance. I note that, in order to obtain any financial information, the Parliamentary Budget Office, as conceived by the government, will have to enter into memorandums of understanding with the various departments. One can imagine how difficult that process will be and how utterly uncooperative and unhelpful those departments will be because they will, naturally, resent any trespassing on their turf. They will do everything they can, and they would do this whether it was a coalition government or a Labor government or any other party's government—they will not want to assist somebody second-guessing their work, even though that is their job. They will provide the same enthusiastic cooperation that many departments provide when they are confronted with parliamentary committees.

Our approach, the shadow Treasurer's approach, is very different. Firstly, our bill would establish the Parliamentary Budget Office as an independent statutory body. Secondly, it will have essentially the same powers as the Australian National Audit Office to obtain information from government departments. It will not have to enter into a memorandum of understanding—though it may choose to do so—but a department will know that if it is not cooperative the Parliamentary Budget Office will be able to haul those officers of the department in and demand documents and answers and actually be able to get the financial raw material that enables it to do its job.

One of the curiosities of the government's legislation—and I think it underlines the haste in which it was put together—is that it says on the first page of the explanatory memorandum that the mandate of the Parliamentary Budget Office is:

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

That all sounds fine until you actually get to the legislation and you see that the Parliamentary Budget Officer's functions, according to the government's bill, do not include preparing economic forecasts or preparing budget estimates. In other words, it has to accept the estimates and forecasts that are provided to it by the Treasury. That is absurd. The Parliamentary Budget Office should be entitled to form its own views. I gather from the record of the parliamentary committee that the government was concerned that it might be embarrassing if they came to different opinions. With great respect, that is ridiculous. If you give two economic forecasters the task of forming a view on any economic matter, they might come up with the same conclusion but they are very likely to come up with differing conclusions—but we are all used to that. We deal with many different assessments and forecasts and we are able to assess them all and take them all into account in forming our own view.

Providing a second opinion is enormously valuable. What we ought to be doing here as a parliament is moving the balance back in favour of the parliament as against the executive. That is what this is all about. In our system of government, as I said at the outset, the balance is overwhelmingly with the government—the executive—because the executive by definition controls at least half the parliament. This gives the parliament some real ammunition, or at least the ability to form some ammunition and resources, that enables it to match, albeit in a very small way, the efforts of the government.

Another issue that I know the shadow Treasurer spoke about earlier today at great length—at appropriately great length, I might say, but I shall be brief—is the question of confidentiality. It is very important that members and senators who deal with the Parliamentary Budget Office be able to do so confidentially. That is provided for in the legislation other than in respect of the election period—in the so-called caretaker period. In effect, exactly the same provisions that apply to the costings done by the department of finance and the Treasury under the Charter of Budget Honesty Act are provided for with respect to this new office. That is simply not appropriate. It is important that an opposition or a minor party be able to go to the Parliamentary Budget Office with a policy, have it costed confidentially—in effect, have a dialogue with the Parliamentary Budget Office—and be able to thereby become better informed themselves and perhaps come to the conclusion that a particular proposal was not a good idea after all and maybe a different way to deal with it could be adopted. Ultimately, the consequence of not having your policies costed is that the public form a judgment on that. But it is simply unnecessary and inappropriate to say that there can be no confidential discussions had or assessments made in the lead-up to an election.

After all, the objective here is not political game playing; the objective here is to give greater financial and economic resources to the parliament, which in large measure means the opposition, Independents and minor parties, so that the parliament can do a better job of holding the government to account. This is a vital reform to our democracy and what the government is proposing is simply not good enough. (Time expired)