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Wednesday, 23 November 2011
Page: 9334


Senator RYAN (Victoria) (12:25): It is a pleasure to follow Senator Birmingham in this debate. I would like to make a number of points. I have had some experience with budget offices overseas, having visited the Canadian budget office last year and having learnt from the development of that budget office and the way its role has slightly changed over time. I will go into that shortly.

Senator Birmingham referred to the sorts of debates we have in Australia during our election campaigns. One of the things about Australian election campaigns and Australian politics when compared with those of many other Western democracies is the focus upon economics. There are few other democracies that have as extensive a consideration of the cost of policy initiatives. Senator Birmingham quite rightly referred to the problem now of fighting over the policy costings, but that is a reflection of a recent trend that in itself is actually quite positive. Too many countries around the world are in trouble today because they have not focused on the costs of policies and initiatives. Political parties have had abstract ideas without trying to communicate to the people what the cost of those policies may be, and the electorate is no better off for that in the long run. The Australian electorate has in fact been very well served by the two major parties over the last 30 years and by a political debate that has always tried to ensure, at least on this side of the chamber, that the cost of a policy or initiative is outlined.

What has happened of late is that we have started to debate what the cost of a policy might be rather than having competing policies, competing for the use of limited government resources. That is a reflection of the increasing professionalisation of politics, for lack of a better way of putting it. Costing policies is now increasingly resource intensive. It is not something that can easily be done outside the resources of the Treasury and the Department of Finance and Deregulation. That is a challenge that has existed for oppositions all through the Western world.

What this Parliamentary Service Amendment (Parliamentary Budget Office) Bill would do, with the incorporation of the amendments to be moved by Senator Cormann, is to start to redress that. It would take us back to a situation where the electorate would not be faced with people arguing over the cost of a particular policy as the government—particularly this govern­ment—tries to limit the flexibility of the opposition. That has been particularly the case under the current government, as it has sought to distract people from what it itself has been up to. This bill tries to give the electorate a real choice between competing uses of limited government resources. That is something that Australian politics has done quite well over the last few decades and it is something that western Europe and the United States would probably have benefited from. They might not have found themselves in the fiscal situation that they are in.

I am a firm believer that it has actually been the quality of political debate over most of the last 30 years in Australia that has put pressure upon governments to maintain responsible fiscal settings. While some economists and some parties that sit at the end of this chamber may complain about the previous government's focus upon the elimination of debt, we know that irresponsible government borrowing does not just ensure a happier day today and a short-term economic quick fix; it has massive penalties in the future. A dollar borrowed today is merely a dollar of tax deferred plus interest. So, when governments borrow amounts of money and when they are wasted and when they are spent irresponsibly, you do not eliminate the payback. You do not eliminate Judgment Day. You simply put it off. In western Europe, we are now seeing the true cost of that on a generation in a country like Spain, with unemployment at chronic levels of over 20 per cent generally and nearly 50 per cent, facing austerity regimes merely because governments have run up too much debt. That is a generational inequity.

The coalition strongly support the amendments to be moved by Senator Cormann. We have form in this regard. It was the coalition that introduced the Charter of Budget Honesty after the 1996 election, when the then Labor government did everything it could leading into the 1996 election to hide the true state of the books from the people—and there was no mechanism for the true state of the books to be made known. The coalition legislated that and it has informed our political debate ever since, but it has not kept up with the times.

The increasing need for serious resources to cost complex policies has meant that we do need to move with the times, and a real Parliamentary Budget Office is an important part of this. It is sad that the government has not lived up to these particular ideals. Several years ago, not long after I commen­ced in this place, when the opposition proposed a Parliamentary Budget Office, the idea was ignored and dismissed by the government. Yet, now, they come to us with an illusion of a Parliamentary Budget Office, as they do in so many other areas—the illusion of economic reform and the illusion of fiscal sustainability—in order to try to have a political quick fix with their partners in government down the end of this chamber and in the other place. This shows the double standards of the Greens with the government.

The release of requests for costings that apply to members of parliament under this proposed Parliamentary Budget Office, which we are seeking to amend, does not apply when the government seek different proposals to be costed by Treasury and the Department of Finance and Deregulation. I note the Greens' commitment to transparency has seemed to stop now that they have access to Treasury via their deal with the government. They are not as keen on transparency generally now. My colleagues speaking earlier outlined the outrageous situation of the guillotine being imposed on multiple unrelated bills every night that we sit in this place this week, and the farce of last night where at one point even the government did not know how it was voting on a bill and we nearly had to have a recommittal, and the question had to be put again.

Now that the Greens sit with the government, now that they have access to the Prime Minister more than most members of the government backbench, they are not as keen on transparency in debate. The carbon tax modelling details have not all been released because the government and their Greens allies do not want real scrutiny of that economic modelling. That is a pertinent point with regard to this bill, because this Parliamentary Budget Office is seriously curtailed in the activities it can undertake, because the government do not want serious scrutiny of their economic assumptions and modelling. Last night, we saw legislation passed in the lower house following a secret deal with the Greens in the dead of night. The House of Representatives was not informed about what the deal was. The member for Melbourne was on the television this morning saying, 'It's up to the government to release it.' If you are party to the deal, you can release it too. The Greens' commitment to transparency is nothing but a sham. They have access to Treasury through their deal with the Prime Minister.

There are problems with this bill in the sense that it does not create a truly independent source of advice for members of parliament. The memorandums of understanding that this bill institutes, as opposed to the rights to access information, which are incorporated in the amendments to be moved by Senator Cormann, ensure that the information that the Parliamentary Budget Office can have is really at the whim of the executive. Those MOUs have to be undertaken by agreement, whereas a real Parliamentary Budget Office has access to all the information held by the department. If we look at the carbon tax modelling, this will mean that the government could refuse to release all the assumptions, as they are refusing to the Senate and the House of Representatives, that underpin the carbon tax modelling. Yet, under a Parliamentary Budget Office that we would seek to establish, that would not be available to the government to prevent the PBO having access to it.

The provisions about publishing requests are particularly pernicious. This is the fundamental flaw in the bill, in my view. The Parliamentary Budget Office should actually facilitate an iterative process. It should facilitate a process whereby members of parliament—parties, Independents and individual members—can seek to develop and refine ideas. I want members of parliament to understand the cost of the policies they propose. I understand that is not necessarily the case with the Greens, who prefer to propose ideas in the abstract. It used to be the case with the Labor Party in their previous iteration in government, at least for a few years when people like Senator Walsh were in this place, a trend I notice they seem to have lost.

This PBO should facilitate members of parliament developing an idea, seeking analysis of its cost, understanding that that might be more than the budget can afford and then seeking to reduce that or refine it to make it more targeted, to more effectively utilise limited public resources. But this PBO does not allow that. It seeks to publish all that information and destroy any capacity for a member of parliament to undertake that iterative process. I note that the same principles of disclosure do not apply to the government seeking such advice from Treasury or Finance. The government can seek to refine policies as often as it would like with the departments of Treasury and finance—and I understand now so can the Greens and the Independents. However, none of those details are released, none of those earlier assessments as they are attempting to refine policy are released—and I would not necessarily in all cases seek access to that information. Why on earth should people seeking to use the Parliamentary Budget Office have that information released as they attempt to develop and refine policy? There has been no justification and no explanation for this particular provision.

Senator Milne: Madam Acting Deputy President, I rise on a point of order. I draw the attention of Senator Ryan to the bill, because everything he is saying is actually untrue.

Senator Cormann: Madam Acting Deputy President, on the point of order: Senator Ryan is very clearly and very eloquently addressing the bill before the chamber. There is no point of order and I recommend you rule that way.

The ACTING DEPUTY PRESIDENT ( Senator Crossin ): I will be ruling that way, not Senator Milne, Senator Cormann. Senator Ryan, I draw your attention to the bill and I ask you to continue your contribution.

Senator RYAN: I am, respectfully, not sure how I could be more relevant to the bill. I detect a touch of sensitivity from that particular corner of the chamber in Senator Milne. The point that I was outlining is that the opposition wants to allow the PBO the same iterative process and the same confidential process of developing and refining policy without its release to the public as is available to the government of the day—and, Senator Milne, as I understand it, as is available to the Greens via your deal with the government of the day. I remember the day, Senator Milne, when the Greens used to care about members of parliament having some degree of autonomy. That process is at the core of the flaws in this bill. It is not something that applies to the Parliamentary Library. The Parliamentary Library has confidentiality provisions that protect the work between members and the Parliamentary Library. The release of information by the PBO during the election period undermines that.

Secondly, the Parliamentary Budget Office proposed in this bill by the govern­ment, the Greens and the Independents is specifically precluded from developing alternative economic forecasts, whether that be at the whole-of-budget level or at the program level. Again, there is no justifi­cation for this. I am in favour of competition but it seems like the government does not want any competition in economic forecasting. Given this government's record since it took office four years ago, I think a bit of competition might improve its performance. I do not see why there is no provision for the PBO to question the assumptions in government forecasts and come up with its own. We would have benefited from that during the first stimulus package. Maybe, just maybe, the government and the Greens might have listened to a PBO that outlined that the pink batts program was going to blow out or that, as Senator Birmingham said, the Green Loans program was going to blow out. But the government does not want to see these assumptions challenged.

Overseas, the Canadian Parliamentary Budget Office does put out alternative forecasts, and it does ensure that the papers put out by the Treasurer and the finance minister are not able to be completely unchallenged. We have lots of economists in Australia who challenge the government's forecasts. I do not see why we should have only Access Economics doing it rather than the Parliamentary Budget Office. More particularly, why is it prohibited at a program or agency level? Why can we not have alternative forecasts of programs? It seems that the government, again, is running away from real competition in this regard.

My visit to the Canadian Parliamentary Budget Office last year was very informative. One of the most important things they outlined was that there did need to be a degree of confidentiality to ensure that members of parliament could have an iterative process of developing and refining policy. More important is the ability to access information. Every budget office, whether it is a CBO or a PBO in a Westminster-style parliament, has had challenges in accessing information because Treasury and Finance or whatever they are called in various countries do like to protect their patch. They are not as in favour of competition when it comes to economic forecasting as they might be, for example, in the dairy industry, Senator Williams.

Competition in all regards is good, and in this regard in particular we should be empowering the Parliamentary Budget Office to get that information, absent an MOU, so it can get this information out to parliamentarians and, through them, to the people. A Parliamentary Budget Office should be, as it was put to me, a 'decision aid' for members of parliament. It should inform parliamentary debate and public debate about the opportunity cost of not doing something or initiating a particular policy. Our country would be a lot better off if there were more of this and less debate over costings, as Senator Birmingham outlined.

The government is seeking to nobble the PBO and ensure that it does not fulfil that purpose, to create this illusion that there is some source of advice but then to set it up in such a way that it cannot be used by the opposition of the day or any minor parties who are not part of the deal with the government.

This should have been a day when the parliament was particularly pleased about instituting a new process that informed debate for the public and for us, that added to transparency and that heightened the level of economic debate in this country, which is so critical. Absent the amendments to be moved by Senator Cormann, it is sad that today will not be that day. I urge the Senate to consider those amendments and ensure that we deliver this Parliamentary Budget Office and meet those objectives we set out earlier.