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Monday, 12 September 2011
Page: 9661

Mr MORRISON (Cook) (18:18): I rise to speak on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011 and particularly on the merits of and need for the creation of a parliamentary budget office. As someone who has spent a great deal of time around election campaigns both in my capacity in this place and in the party organisation, I know that it is genuinely time to end the circus around budget costings at election time. It is important that the Australian public have access to positions that are put forward by the parties at elections and that those parties have available to them proper resources and independent advice to assist them to put forward their positions. Otherwise the circus will continue and the public debate that centres around these matters at election time will distract from the opportunity to focus on the substance of the policies that are being put forward.

I strongly commend the initiative to have a parliamentary budget office, but it has to be fair dinkum: it has to provide the opportunity for all members of this House and the other place to access independent costings. This will aid policy development. It will aid not only the debates that we have in this place but also the debates we have outside this place in our efforts to frame, consider and develop positive and constructive policy. The benefits of having a parliamentary budget office will accrue only if it is a genuinely independent office that enables a confidential and even an iterative process to occur. It is important that any member can have confidence to determine that, when any information they are seeking to be costed is released, they can have confidence in the process in which they engage in to obtain those costings.

The government's bill is yet another attempt to compromise an important and independent process. Just last week I had the unfortunate experience of watching this government abuse yet another important, independent process when officials from the Department of Immigration and Citizenship came to brief the Leader of the Opposition, the shadow Attorney-General and me. This is an important, independent process that members in this House rely on—the provision of briefings from government officials and government agencies. What did we learn? We learnt that the government had used the officials to brief the media before briefing the opposition, which was their purpose. I am sure the minister's old boss, the former minister in New South Wales, would have been quite proud to see public officials used and abused. We saw this process happen in New South Wales year in and year out. It led to an undermining of public confidence in the way that that government was run. That is what is at stake here—the opportunity to have a genuine, independent parliamentary budget office that can assist the workings of this place, the workings of proper policy debate and the development of very sound policy. The Parliamentary Budget Office is supposed to be one of the innovations of this parliament. While the failure of the minority government that has formed has meant that this parliament has been disappointing, there is an opportunity to get at least something right. I do not believe the government is acting as a willing partner in this exercise in the way they brought this bill to this House. That is why the coalition is seeking to restore that opportunity with the amendments that have been circulated by the member for North Sydney, the shadow Treasurer.

As a consequence of the aspiration to form a parliamentary budget office, the Joint Select Committee on the Parliamentary Budget Office was formed to inquire into the matter and found in its final report, handed down earlier this year, that there was a significant shortfall in the way the government and, indeed, the parliament approaches matters of fiscal importance. The final report observed:

There is currently no independent body in Australia that specialises in high quality research and analysis on fiscal policy for the Parliament.

The ideal solution advocated by this committee was the creation of the Parliamentary Budget Office to fill the void and assume this role as a vigorously independent arbitrator. This was first flagged by the member for Wentworth. It was an initiative that he put forward for the reasons already outlined in this place by other members.

The ideal solution advocated by the committee was the creation of this budget office. The committee recommended the establishment of a budget office 'dedicated to serving the Australian parliament'. Let us focus for a moment on those words: an office 'dedicated to serving the Australian parliament'. They do not say that the office should be dedicated to serving the government of the day or that it should be abused in some sort of political process and power game by the government; they say that the office is supposed to serve the members of this parliament. I think that is a telling choice of words. The office is supposed to serve the interests of the people and the broader democratic function of this parliament, not the interests of any one political party or the executive wing. The committee made the considered recommendation that the mandate of the Parliamentary Budget Office be:

… to inform the Parliament by providing independent, non-partisan and policy neutral analysis on the full Budget cycle, fiscal policy and the financial implications of proposals.

Again the emphasis is on the word 'independent'. This position must serve as more than simply a megaphone projecting or regurgitating existing partisan politics. If members wish to outline particular policy proposals and put them in the public domain, they will choose to do so. Their proposals should not be released into the public domain as an automatic consequence of their seeking to have robust and independent analysis put in place. That would mean the withdrawal of the genuine opportunity to go through an iterative process of policy development.

This entity must be separate and it must be equipped with access to documentation and information in order to make authoritative analyses on matters that have undoubtable consequences for the Australian hip pocket and family budget. The joint committee recommended that the main function was:

… to respond to requests of Senators, Members and parliamentary committees, formally contribute to committee inquiries, publish self-initiated work, and prepare costings of election commitments.

The committee found that the election costings provisions of the Charter of Budget Honesty Act 1998—

which was so flagrantly abused by the government during the last election, particularly—

… in enabling the electorate to be better informed about the financial implications of election commitments.

The report made the shrewd observation that the voting public was not able to engage with quality political debate without an independent and potentially very valuable source of information.

The committee recommended incentives for parties to use a costings process in order to enhance transparency and bolster accountability. Importantly, the committee found that in order for this position to correlate with proven international best practice the position of a parliamentary budget officer would have to be created as an independent office of the parliament, not of the executive, which the government seems to have attempted to do de facto in the way they have framed this bill. However, if it were set up in the way that the committee recommended, the office could more clearly serve the ongoing information and scrutiny needs of the parliament as a whole, therefore improving fiscal transparency and executive accountability, which is a notion that seems foreign to this government.

The report made a number of recommendations to further strengthen and consolidate the ability of the office to supply this robust and independent analysis. They included making provision for the office to be able to access information held by government departments as well as allowing for a mechanism by which the Joint Committee of Public Accounts and Audit could oversee the Parliamentary Budget Office position. But it is clear that the creation of this office must go towards the consolidation of an independent entity capable of exercising analytical judgment without interference or influence from either the government or the opposition.

The work of the Joint Select Committee on the Parliamentary Budget Office argues very clearly that, in the interests of open and informed political debate and in order to best give the opportunity for our democracy to continue to flourish as it ought, there is clearly a need for an independent authority in the arena—especially at election time, when the clamour of political promises is at its peak.

The committee recommended that wherever possible the work of the office be made publicly available; but, again, that would be initiated by the member, as we have proposed in our amendments. The coalition has always felt very strongly on the issue, and I remind the House that the establishment of this office was a coalition election commitment. While we agree with the government on the need for the position, our concern with the government's bill before us is, as I have noted, that it take deliberate steps to ensure that the office functions as little more than an extension or peripheral arm of the Treasury and the Department of Finance and Deregulation.

This bill requires that the office make an arrangement in writing to seek information and documents and prevents the office from preparing economic forecasts and budget estimates. Heaven help the government if they were ever subject to that sort of scrutiny! What use is an independent fiscal voice if it is openly silenced and gagged and so prevented from passing analytical judgment and constructive comment on such fundamental political functions as the budget that this House is asked to consider every May? The coalition has conscientiously strived to ensure that the office is an entirely independent entity: an independent statutory body with strong powers to obtain information from government agencies and departments and supply independent analysis of economic forecasts, including the budget. The government bill requires the PBO, or Parliamentary Budget Officer, to make an arrangement in writing, as I have said. I think this is a form of censorship that hardly correlates with the concept the government would have us believe it is proposing: an unbiased and independent umpire. The bill put forward by my colleague the member for North Sydney is in stark contrast with what the government is proposing, and his bill should be commended to the House. If the government truly believe in the need for an open, impartial voice of economic reason, they would alter their bill to provide for this truly objective source of advice and information to be made available to members of this place and the other. This means that the office must have broad scope and access to the documentation they need and the ability to exercise their informed and independent judgment in the security of the workings of the government's budget, regardless of which side of the chamber these sums are derived from. Interestingly, the joint select committee referred to international best practice.

For this office to operate effectively and with credibility and integrity, it deserves to, I think, follow the model of the United States through the Congressional Budget Office, which other members have referred to in their remarks. For the budget office to have integrity, it must mirror that working model. The Congressional Budget Office mandate is to supply congress with objective, non-partisan and timely analysis to aid in economic and budgetary decisions on the wide array of programs covered by the budget and the information estimates required for congressional budget processes. The coalition's primary objection is that the model before us in its current form falls significantly short of this best-practice model.

Each year at the end of January, the Congressional Budget Office reports on the economic and budget outlook. It includes estimates on spending and revenue levels for the next decade and becomes a budget baseline which is then used by members of congress as a neutral benchmark to measure the effect of proposed bills and legislation. The baseline is constructed according to specific laws which instruct the budget office to assume that current spending and revenue laws continue without change. It is not a prediction of future budget outcomes; however, it does reflect the office's best judgment about the way the economy and other factors will influence federal revenues and spending under existing laws. The Congressional Budget Office is a useful, practical tool that serves the purpose of that legislature providing credible advice.

The American Congressional Budget Office employs about 250 people. It operates as an agency comprised of predominantly economists and policy analysts. Three out of four staff hold advanced degrees, the majority in economics or public policy. In the 2010 financial year, the budget office in the United States issued 33 studies and reports, 12 briefs, 12 Monthly Budget Reviews, 35 letters, 14 presentations and two background papers, in addition to two other publications and a vast array of supplemental data. The Congressional Budget Office testified before congress 14 times on a range of issues. In the 2010 calendar year, the budget office completed 650 federal cost estimates as well as 475 estimates on the impact of legislation on state and local governments. The Congressional Budget Office provides up-to-date and easily accessible data on its website, including current budget and economic projections and appropriations. Importantly, the Congressional Budget Office assists the House and Senate budget committees of the United States and, more generally, congress by putting together reports and analyses. In accordance with its mandate, the Congressional Budget Office reports contain no policy recommendations but are objective and impartial.

It is true that Australia's democratic traditions and history have taken a different path to those of the United States, but quite clearly the Congressional Budget Office provides the benchmark which we would seek to emulate, and that is what the coalition's amendments are geared towards. So I would implore the government to get serious about having a fair dinkum parliamentary budget office and not go along with this corruption of the process, which they seem to wallow in on so many occasions, and so happily, to avoid the transparency and scrutiny that is proper for a democracy of our standing. I urge the government to reconsider and live up to at least one expectation of this parliament and deliver a fair dinkum, independent Commonwealth parliamentary budget office.