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Wednesday, 23 November 2011
Page: 9325


Senator BUSHBY (TasmaniaDeputy Opposition Whip in the Senate) (11:45): I rise to contribute to the debate on the Parliamentary Service Amendment (Parlia­mentary Budget Officer) Bill 2011. It is pleasing to see this place debating the idea of the establishment of a Parliamentary Budget Office, but it is a great shame that, like so many good ideas that come before this Gillard-Brown Labor government, the government is taking a good idea and turning it into something very bad and smelly.

The coalition has been calling for a Parliamentary Budget Office for many years. Indeed, the member for Wentworth a number of years ago when he was shadow Treasurer led the charge for this. I also believe that my then fellow Tasmanian senator, Guy Barnett, took a great interest in the Parliamentary Budget Office, and many others on this side of the chamber have been calling for a Parliamentary Budget Office, for good reason. Such a move would continue the coalition's proud record of budget transparency, most recently highlighted when we won government in 1996 through the implementation of the Charter of Budget Honesty.

At that time there was very good reason for us to do this. Having won government in 1996, we found that there was a $96 billion black hole that the previous Hawke and Keating governments had left us. In the lead-up to that election the fiscal situation that the government had presided over, as presented to us and to the Australian voting public at that time, was quite different from the reality that we found when we got into government. It was so different that I will not be over­stating it to say that the then government had misrepresented the fiscal position, with the end result that the incoming government in 1996 found that the fiscal flexibility it had to deliver its program was severely undermined and reduced. Essentially, the Australian public had been duped by the previous Labor government over the latter's fiscal handling of the economy. As a result of that, the then Howard government moved to set up the Charter of Budget Honesty to ensure that in the lead-up to any future elections the opposition of the day, together with the public, would have an accurate and full understanding of the true fiscal position of the government. This would mean that the public could make informed choices and that the opposition of the time could formulate its legislative agenda and its program as a new government in the full knowledge of the true fiscal position of the government and its capabilities.

This leads me onto the Parliamentary Budget Office. This idea takes the delivery of transparency to a new height. However, the government's proposed delivery of a Parliamentary Budget Office leaves a lot to be desired. Two bills to establish a Parliamentary Budget Office have been brought before parliament in recent times: the shadow Treasurer introduced a private member's bill to establish a Parliamentary Budget Office on 22 August and, surprisingly, the government introduced its own bill on 24 August—just two days later. Having examined both bills—and I think the coalition's view is that ours is not going to get up—we will propose amendments to the government's bill to try to take what is a good idea executed very poorly and try to fix the mess and turn it into something that will actually deliver the outcomes that a Parliamentary Budget Office should deliver. In the instance that we are not successful, the coalition will not be supporting the government's bill in an unamended state, because we do not believe that it will deliver what is intended nor the benefits that should flow to parliament and to the Australian people from having a properly-running and effective Parliamentary Budget Office.

The government has chosen to amend existing acts in order to establish its Parliamentary Budget Office. Schedule 1 amends the Parliamentary Service Act 1999. This schedule establishes the Parliamentary Budget Office and includes its purpose and functions, its access to information and its oversight arrangements. It outlines employ­ment conditions and arrangements for the Parliamentary Budget Officer and introduces a requirement for a Parliamentary Budget Officer to prepare an annual report. 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 guidelines 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 and amends the Remuneration Tribunal Act and the Long Service Leave (Commonwealth Employees) Act to ensure that these acts encompass the position of the Parliamentary Budget Officer. That is how the government is proposing to structure the change that will deliver the Parliamentary Budget Office.

Our opposition to it stems from the fact that it fails to deliver on a number of aspects that we believe a Parliamentary Budget Office should deliver. I will run through the difference between the government's position as represented by this bill and the coalition's position as represented in the bill that we put forward. One of the key differences is providing the Parliamentary Budget Office with independence from the Treasury and the Department of Finance and Deregulation. The government's position is that the PBO ought to be established under the govern­ment. It would deliberately ensure that the PBO is functionally little more than an extension of the Treasury and the Department of Finance and Deregulation, because it would require the PBO to make arrangements in writing to obtain information and documents, preventing the Parliamentary Budget Office from preparing economic forecasts and budget estimates. Contrast this with the coalition's position: we have made a conscious decision to ensure that the Parliamentary Budget Office is an independent body separate from the Treasury and the Department of Finance and Deregulation. It would be an independent statutory body. Under our proposal it would have strong powers to obtain information from government departments and government agencies. It would be able to provide analysis of economic forecasts and budget estimates.

Another key difference is in the powers granted to the Parliamentary Budget Office to obtain information. Under the government's bill, the PBO will be required 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 Office's functions. In other words, it will need to agree to a memorandum of understanding. A Parliamentary Budget Office established under the coalition's proposal would not be constrained by memorandums of understanding put forward by government departments, who may very well wish to protect their positions, or agreements which stipulate what information the Parliamentary Budget Office may or may not have. The coalition's proposal would provide considerable information-gathering powers and secrecy for the Parliamentary Budget Office, which we consider vital if you are going to give it the teeth to achieve its fundamental purpose.

Another key difference is that the government's bill restricts the functions which can be performed by the Parliamentary Budget Office. Under the government's bill, the PBO will be specifically prevented 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, where the mandate of the Parliamentary Budget Office has been described as 'to inform the Parliament by providing independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals'. Contrast this with our proposal, under which the PBO would be able to provide objective and impartial advice on the Commonwealth budget and budget cycle, including the impact of major policy announcements.

Another key difference is the confidentiality of policy costing performed during and after an election period. Under the government's proposal, as represented in the bill that we are debating today, the policy costing options put forward 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 request as soon as possible after receiving the request during the caretaker period and on or after polling day. The government has also taken the extra step of ensuring that requests for the costing of policies or the withdrawal of policies to be costed, or the analysis of the budget, or costings and analysis for parliamentary committees and the results of any other work done in the performance of the functions of the Parliamentary Budget Officer made during the caretaker period and on or after polling day are publicly released by the Parliamentary Budget Officer. Contrast this with our position. The coalition's Parliamentary Budget Office provides for complete confidentiality for all requests from MPs and senators. This would allow non-government members and senators to engage in discussions with the Parliamentary Budget Office as well as allowing views to be challenged in the private domain. The Parliamentary Budget Officer would not be permitted to publish costings without the permission of the non-government member or senator.

That is one of the key differences between our proposal and that of the government. One of the real advantages of a Parliamentary Budget Office is that it should be answerable to parliament and not to the government of the day. It is a tool to equip members of parliament to properly do their job, to properly cost proposals they may wish to put before parliament for consideration and to enable them to do that in a way that allows them to properly plan it without exposing what they are doing to the public. The reality is that members of parliament from time to time may have ideas that they think are good ideas, ideas that they want to work through. But having worked through them they might find they are not fiscally possible in the current fiscal climate. This Parliamentary Budget Office would give members of parliament an opportunity to actually examine those issues without fear of that idea being exposed as fiscally irresponsible even though they might have initially approached it with the best of intentions and only found out after referring it to the Parliamentary Budget Office that it was going to cost more than they had anticipated. That then leaves it open to their political opponents to make political mayhem out of the fact that they were looking at it in the first place, which I think would tend to lead to a reticence on the part of members of parliament to actually put things forward to the Parliamentary Budget Office because they would be concerned about what might happen to it afterwards. As a result, potentially good ideas that they could be exploring and using the office to assist them with would never be explored and never come to fruition, even though they may have been a good ideas.

The idea of a Parliamentary Budget Office takes the delivery of transparency to a new height, but the problem lies in the way the government is seeking to deliver that. The primary role of a Parliamentary Budget Office should be as an independent assessor of government fiscal claims. The fact is that Treasury is not an independent assessor of government fiscal claims. That is not a criticism of Treasury. Treasury should never be considered a body independent of government. It is a government department that works to the Treasurer and the government and it is charged with responsibility for delivering policy decisions that are made by the government. That is the way it should be. A necessary consequence of that is that Treasury's role is to help the government deliver those policy decisions. To the extent that it is possible whilst retaining its integrity, it will present accurately and truthfully the information, data and modelling results with the best possible face that can be put forward in terms of assisting the government to deliver what it is doing. That is Treasury's role: they will go through the data, they will look at modelling and they will use it in the best possible way they can to assist the government to deliver its policy outcomes. That is not a criticism; it is just a fact.

Our Parliamentary Budget Office would be quite different in that respect because it would be answerable to parliament, not to the government of the day. As such, there is a potential through a Parliamentary Budget Office for us to have a completely objective, completely non-biased and fearless office whereby parliament can establish the reality of fiscal claims, claims about the current state of the economy and claims about the potential impacts that government policy decisions may have in the real world, without the constraint that is placed upon Treasury of effectively being servants to their political masters. An equivalent to the Parliamentary Budget Office has been employed in a number of other countries, including the United States, where they have the Congressional Budget Office, and Canada and Korea. They all have slightly different models and they do things slightly differently, but they are all independent. I do not think the proposal before us today delivers the same degree of independence that we see in any of those places, particularly those places where the system works well. In all of those organisations scope exists for an independent assessment of claims about costings, the fiscal position, macroeconomic positions like growth projections and so on, and they provide an additional assessment and a more independent assessment of those sorts of issues than you would get from their central treasury departments.

If we look at the last four years, we can see that this independent aspect of a Parliamentary Budget Office is sorely needed in Australia. Government projections on growth, program costings, the impact of spending and policies on employment and other measures have consistently failed to be reflected by outcomes. In some cases extraneous affairs have intervened, and the classic example of that is the global financial crisis. Fair enough, to some extent things that occur outside the control of government do have an impact on projections and the results delivered at the end of budgetary periods. But in most cases, and even during the depths of the global financial crisis, it is very easy to identify that many of these projections are based on what can only be described as heroic assumptions—such as record terms of trade or commodity prices continuing to rise ad infinitum or unseen periods of record growth or even other countries doing certain things—and it is patently obvious to any informed observer that the likelihood of such projections being delivered is almost nil. A Parliamentary Budget Office, if set up in the right way, would hopefully be able to conduct objective assessments of the issues, using the same information and data available to government agencies, and come to conclusions less influenced by the need to serve their political masters. This highlights the main advantage of a Parliamentary Budget Office—its masters are parliament and not the government.

There will be a small reversal of the trampling by the government of the role of parliament if a proper Parliamentary Budget Office is put in place. There has been a trampling of democracy in this place, particularly in recent days. The Greens have combined with the Labor Party to guillotine debate on bills in a way that I do not think this parliament has ever seen before. People point to the time we had majority government, between 2005 and 2008, but I do not think in any case any bill was passed through this place without one word of debate at any stage of its passage. In the last few nights we have seen bill after bill after bill guillotined—rammed through this place without any opportunity for any second reading debate, any committee stage or any third reading debate. There has not been one word said on any of these bills despite the fact that they are making changes that are important to the people of this country. They may have unintended consequences, they have huge impacts on Australians, and yet this place has had no opportunity to debate them.

That issue is not the subject of this bill, but I highlight it because a Parliamentary Budget Office does, if properly implemented, give an opportunity to redress some of the balance that has been lost in the last four years under Labor, and even more so in the last year under the Labor-Greens government parties, and to give a little bit of power back to parliament to ensure that parliament can properly assess claims that government is making and properly test the programs and projects that government is seeking to implement.

Over the last four years this government has been able to get away with murder in a budgetary sense. It makes claims and if those claims are backed up even semantically by Treasury the media swallow them. But the media never go back afterwards and ask why those claims were not met in reality. Very few projections or claims made by Treasury in their modelling over the last four years have been followed by figures anything like what was forecast. As I say, some of that is because of extraneous matters but a lot of it is because of heroic assumptions built into the modelling in the first place. Blind Betty could see they were heroic and unlikely to be delivered in reality.

This Parliamentary Budget Office proposal started off with good intentions. I think a properly constructed and well set up Parliamentary Budget Office would be of immense value to Australia and to the Australian parliament and would deliver fantastic outcomes for the people of Australia, but once again this government has taken a good idea and ruined it. I commend the opposition's proposed amendments and hope that the parliament will adopt them. (Time expired)