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Monday, 12 September 2011
Page: 9659


Mr TEHAN (Wannon) (18:03): As I rise tonight, can I say that it is an honour to follow the member for Wentworth in the debate on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011. As he has so well articulated, it was his idea, dating back to 2009, to call for the establishment of a parliamentary budget office to be modelled on that of the US Congressional Budget Office. For those of us who have had the honour and privilege to visit the United States under any of various schemes—I was honoured to go under their young political leaders scheme, where I witnessed the full gamut of everything that the congress has to offer and was briefed on their budgetary office—you could not get a better model. The model which the US congress operates under has two key ingredients: it is confidential in its service and it is also independent in its service. They are the two key ingredients that we should have in Australia when we set up our Parliamentary Budget Office.

It is a shame that, after the member for Wentworth introduced the idea of a parliamentary budget office, it has taken until now for us to be debating this issue and also that the shadow Treasurer has had to introduce a bill calling for a parliamentary budget office for the Treasurer to follow suit and present us with his bill. The worrying aspect of it all, of course, is that in Wayne's world—

The DEPUTY SPEAKER ( Ms AE Burke ): Order! The member will refer to people by their appropriate titles.

Mr TEHAN: In the Treasurer's world, the two key ingredients that you need in a parliamentary budget office, confidentiality and independence, are not there. But they are in the bill that the shadow Treasurer has introduced, and he is to be commended for the excellent work that he has done in this regard.

I hope that the Treasurer takes some time to reflect on the error of his ways, look closely at the coalition's bill and support it. The coalition has been proactive. It has put forward a very sensible, practical approach to how a parliamentary budget office should be set up. It has done so with an air of cooperation. We all know that the Treasurer has been floundering in his role, so the shadow Treasurer has really shown him the way, lent him a helping hand and said, 'Treasurer, we understand that you are a bit of a weak link in this government and that the backbench is talking about your role, so here is a proposal going forward that will help you.' That is what the shadow Treasurer has done. He has come up with a model that shows the Treasurer what a parliamentary budget office should really look like. As has been mentioned before, one of the two key ingredients that it shows is that the model that the shadow Treasurer has introduced is confidential. All services that the Parliamentary Budget Office would provide, whether it be to Independent members, members of the Greens or members of the coalition—in this case, when we are in opposition—would be confidential. It is very important that this service provided is confidential in nature. We all know that the resources that you have in opposition are a lot scarcer than those you have in government. You have the whole backing of a bureaucracy when you are in government. In opposition you do not—you have limited staffing resources, you can call on the services of the Parliamentary Library and you can call on the good graces of those outside the parliament to lend a hand. These bills, if implemented in the correct way, can address that imbalance.

Sadly, if you do not have proper confidentiality in providing the services of a parliamentary budget office, all this will be undone. In many ways, you are just setting up another branch in the Treasury or the department of finance, and this is not what we need for a parliamentary budget office. What we need is an office which is independent and which can provide confidential material, confidential advice and confidential facts, including on economic forecasts.

The importance of this confidentiality was seen in the debate leading up to the 2010 election over the coalition's costings, especially when it came to the NBN. We put to the Treasury our costings and they unfortunately set a lower quantum of savings that would come from our commitment to cancel the NBN, but they would not say why. Of course, the government jumped on this in one of the great scare campaigns and said our costings lacked rigour and that they had a black hole. We all know, as the secretaries of Treasury and Finance made clear afterwards, that they did not want to be in a position to cost the coalition's policies. They did not want to be in a position to have to detail why they used a different interest rate to that which the coalition had assumed, which was the 10-year bond rate. They did not want to be involved in the politics of the government's approach in calling the coalition's election commitments not properly researched and not properly financed—in fact, having a black hole.

It is necessary to avoid this form of politics and to get Treasury and Finance out of the game so they can do the much needed roles that they play. We need this Parliamentary Budget Office, but it has to be done in a confidential way so that if the coalition wants to have some of its policies costed it can approach the Parliamentary Budget Office knowing that it is not going to the executive arm of government to get those costings and knowing that it is not putting the executive arm of government in an invidious position. We will be enabling the parliament to have access to economic costings. As I have said before, it is not only the coalition in opposition that could benefit from this but also the Independents and the Greens, so it is a very sensible approach.

The Parliamentary Budget Office should be independent. If it is not independent, it places the bureaucracy in a difficult situation. The legislation as it currently stands, as the member for Wentworth pointed out, shows that the Parliamentary Budget Office would have to enter into memorandums of understanding with Treasury, the department of finance and any other departments that it wanted to get costings from. One of the great difficulties with this is that these memorandums of understanding could take a long time to be negotiated.

In the six months leading up to an election, when an opposition is looking to have the majority of its policies costed, you could find that the Parliamentary Budget Office is stuck in a huge discussion, debate or conflict with the two key finance departments on the memorandum of understanding. I think we would all agree that this is an unacceptable circumstance. Rather than having the government's model, which calls for this regulatory approach, this negotiation of memorandums of understanding, the Treasurer should just admit that once again he has it wrong, that the shadow Treasurer has come along and given him a helping hand, and just say, 'Okay, we do need full independence.' Our bill would give full independence because, importantly, it would give the Parliamentary Budget Office the same powers as the Australian National Audit Office. Those powers are quite significant. It would enable the Parliamentary Budget Office to be able to demand documents, it would enable them to demand answers, it would enable them to say, 'Challenge some of the costings,' and it would provide a real alternative to the departments of Treasury and Finance.

One of the worries about the bills that the government is putting forward is that in many ways, sadly, it represents the weakness of our current Treasurer. If he were truly an independent Treasurer—if he had his own ideas and the ability to drive the government's economic agenda—I think he would have come up with our bill. But he is so sadly beholden to his department and so sadly bereft of economic leadership that when putting this bill together he has literally gone along with what Treasury and the department of finance have told him.

We cannot blame Treasury and finance for putting the government bill together the way they have, because no federal bureaucracy wants to give power to another organisation or wants to have material it produces double-checked. In a fully functioning parliamentary budget office we would have a fully functioning ability to provide a second opinion to what Treasury and finance were putting forward. I can understand their reticence with this. They have great pride in the work they do and in the work they submit to the parliament, but we should never walk away from increased transparency, especially when it comes to government and the use of taxpayers' money. As has been highlighted before, in the NBN we have a project which will amount to an expenditure of over $50 billion; yet the opposition has no ability as it currently stands to get a cost-benefit analysis of this enormous expenditure of taxpayers' money. If we had a proper parliamentary budget office which offered a confidential service and an independent service we would be able to get this work done.

I make one last point before concluding. Sadly, the Charter of Budget Honesty has probably come to the end of its use-by date if the government is going to continue to use it in the way that it has. In both 2007 and 2010 the Australian Labor Party released their costings on the day before the election, which meant that there could be no scrutiny and no independent analysis of those costings. That is not what the Charter of Budget Honesty was set up for. We need to move on from that, and that is what the Parliamentary Budget Office would do. The member for Wentworth was in many ways visionary in 2008 when he put forward this idea. He was incredibly worried about expenditure that was going to take place under the Rudd and then the Gillard government. That has proved to be correct. In the last budget we saw a budget deficit of over $40 billion. We have seen net debt hit $110 billion. This is expenditure the likes of which Australia has never before seen.

We need a parliamentary budget office to hold this government's rapid expenditure to account. That is what we have proposed in the bill that we have put forward. It is a better bill because of its confidential and independent nature. I would ask the Treasurer to eat humble pie and do what is in the best interests of the Australian nation by going for the type of parliamentary budget office that we have put forward, which will be confidential and independent in nature.