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Finance and Public Administration Legislation Committee
(Senate-Monday, 11 February 2013)
Department of the Senate
Parliamentary Budget Office
Department of Parliamentary Services
- Department of the Senate
PRIME MINISTER AND CABINET PORTFOLIO
Office of the Official Secretary to the Governor-General
CHAIR (Senator Polley)
Department of the Prime Minister and Cabinet
Dr de Brouwer
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Dr de Brouwer
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Content WindowFinance and Public Administration Legislation Committee - 11/02/2013 - Estimates - PARLIAMENTARY DEPARTMENTS - Parliamentary Budget Office
Parliamentary Budget Office
CHAIR: Welcome. Mr Bowen, I understand you have an opening statement.
Mr Bowen : Yes, thank you. I would like to take this opportunity to bring the committee up to date on the PBO's progress since our last meeting on 15 October. I propose to talk reasonably briefly about staffing, workload, priority setting, access to information, our self-initiated program, and just briefly about my participation in the OECD parliamentary budget officials network.
First of all, on staffing: you might recall that, when we met last, the PBO had eight staff; three were permanent and five were temporary. We now have 24 staff; 20 are permanent and four are temporary. We have been able to recruit staff with a broad range of skills and experience directly relevant to the work of the PBO. We are continuing to recruit to bring the PBO up to its full complement of 30 to 35 staff on a permanent basis.
The PBO's senior management team of six SES is now in place, with all but one of the positions having been filled on a permanent basis. The top structure comprises a fiscal policy analysis division with two SES; a budget analysis division with three SES; and a corporate strategy branch of one SES. Details of the structure are on our website.
Turning to workload: when we last met, the PBO had received 44 costing requests, of which we had completed a grand total of two. The demand for our services and our capacity to respond have increased significantly since then. We have now received 207 requests for work and provided 152 responses. We expect that, as our staff numbers continue to increase and our information bases become more mature, our response rate to requests will also continue to rise.
As to priority setting, how we allocate our finite resources to address competing priorities is something that we consider on a regular basis. To date, requestors have been very helpful in prioritising their own requests, and we appreciate that. As we receive more requests for work from a broader cross-section of the parliament, we will ensure that our resources continue to be deployed on a fair and equitable basis, having regard to the number, complexity and urgency of the requests that we receive from each requestor.
When we get to the caretaker period, we will attempt to finalise any outstanding confidential costings that were submitted prior to the caretaker period commencing. However, we cannot guarantee to do so since our first priority in the caretaker period will be to cost publicly announced policies received during the caretaker period. This is consistent with our obligation under the PBO's legislation to publicly release caretaker costing requests and the PBO's costings, 'as soon as practicable after the requests have been made'. In these circumstances we encourage senators and members to submit any confidential costing requests that they wish to make to the PBO well in advance of the commencement of the caretaker period. Costings prepared before the caretaker period may be resubmitted to the PBO for updating during the caretaker period against the latest budget report—namely, the Pre-election economic and fiscal outlook report, or PEFO. Any requests for costing updates and the PBO's responses during the caretaker period will be made public.
With respect to access to information, I wish to place on the record my gratitude to the wide range of departments and agencies that have been so helpful in responding to the many information requests that they have received from the PBO to date. Some of these requests have been very detailed and quite complex. Much information has been sought and provided within tight time frames. This high level of cooperation in the provision of information to the PBO is much appreciated.
Access to budget information from government departments and agencies, often at a level of detail that is not published routinely, is vital for the PBO to be able to undertake its role effectively. Much of this detailed information is of a nature that could be made public and would be provided in response to an FOI request. Such information, at a minimum, is to be provided to the PBO under the terms of the memorandum of understanding between the Parliamentary Budget Officer and the heads of Commonwealth bodies in relation to the provision of information and documents.
From time to time we may also need to seek access to restricted information—for example, cabinet-in-confidence or commercial-in-confidence material—to enable the PBO to undertake certain costings and analyses. Where such information is provided to the PBO, consistent with its obligations under the MOU, the PBO will take all necessary steps to protect the information from public disclosure.
Currently, the PBO does not have access to certain detailed taxation information from the Australian tax office. We are currently discussing with Treasury and the ATO the scope for workarounds to be put in place that would allow the PBO to utilise certain tax information for costing and analytical purposes without breaching the privacy provisions of the taxation legislation. The option of amending the Tax Administration Act to allow the PBO to access taxpayer protected information on a similar confidential basis to the exemption that applies to Treasury is also under discussion. This option would give the PBO access to the same detailed data used by Treasury in compiling the budget revenue estimates with equivalent obligations on the PBO to protect taxpayer privacy.
I now wish to turn briefly to the PBO's self-initiated program of published work. In our work plan for 2012-13 we indicated that the PBO's self-initiated program was aimed at helping to improve budget transparency and promote a better understanding of the budget and fiscal policy settings. We outlined the general approach that we proposed to take, including a focus on the underlying structure of the budget and the factors that could affect the sustainability of the budget over the medium to longer term.
One factor that provides a partial guide to budget sustainability is the structure of the budget relative to the economic cycle and the impacts of one-off or transitory impacts on revenues and expenses. Adjusting the budget balance for such cyclical and transitory factors reveals what is commonly known as the structural budget balance. The PBO's first published study will examine trends in the structural budget balance over the past decade and the projected shape of the structural budget balance over the 2013-14 budget and forward estimates period.
A number of institutions including the IMF, the OECD and certain parliamentary budget organisations regularly prepare structural budget balance estimates using a range of different methodologies. The results of our analysis will be shaped by the methodology that we adopt and by the assumptions that we make about key variables that are difficult to predict with any degree of certainty, such as movements in the economic cycle and changes in the terms of trade. We will therefore examine the implications of differing methodologies and subject our key assumptions to sensitivity tests that will give us a range of feasible outcomes rather than simply point estimates.
Derivation of estimates of the structural budget balance, while far from an exact science, can provide useful guidance for fiscal policy-making. However, a range of other factors also bear on the sustainability of the budget over the longer term. These factors include the health of the government's balance sheet, in particular the level of net debt; the strength of the economic outlook; and trends in key drivers of the budget. This financial year we also expect to publish a study of the key drivers of the budget by examining trends in major components of the budget over the past 10 years and over the 2013-14 budget and forward estimates period.
This initial study into budget trends will be undertaken at a fairly macro level. It will examine the changing composition of the budget and identify the key components of the budget that will, other things being equal, dominate the structure of budgets in the foreseeable future. Following on from this study, we propose to examine in greater detail the longer-term budgetary implications of a range of key budget drivers. In 2012-13 we propose to commence an analysis of social security and welfare transfer payments that currently account for approximately 30 per cent of total budget outlays. This work is not expected to be completed until 2013-14. We will then progressively turn our attention to other key drivers of the budget including health and education spending.
Finally, for the information of the committee, I have been invited to participate in the fifth annual meeting of the OECD network of parliamentary budget officials and independent fiscal institutions, to be held in Ottawa, Canada on 21and 22 February. This is a very good opportunity for the PBO to learn from the experiences of similar organisations in other OECD countries. I plan to attend the forthcoming meeting and will ensure that the PBO becomes an active participant in the OECD network in the future. With these comments we are happy to address any questions from the committee, and I have for the secretariat copies of my opening statement.
Senator FAULKNER: I will be very brief, because I know opposition senators have a number of questions for Mr Bowen. There are just a couple of issues, Mr Bowen, arising from the opening statement. The first is in relation to the numbers of matters that have been placed before the PBO. I think you mentioned that you had 207 requests and that at the moment you have been able to respond to 152 of them. They were the statistics in your opening statement. I think that it would be helpful to have ongoing statistics; my question really goes to the nature of these statistics.
I assume that you would not wish to—and I completely understand and accept this—in any way indicate, nor should you in my view, which parliamentary party requests might come from? That is a matter that should remain in confidence. But would you be willing to disaggregate requests into categories such as requests from parties and individuals into the future? Or could you think of any other ways of disaggregating those statistics that you have a level of comfort with in terms of providing further and better information to the committee?
Mr Bowen : You are right. I have been and will continue to be reluctant to divulge sources of requests. But in terms of broad categorisation, I do not think there is any confidentiality issue. Let me say that the vast bulk of requests have come from political parties.
Senator FAULKNER: You might take that on notice and give that some consideration so that, over time, the committee can have a better understanding in terms of monitoring the work of the PBO whilst of course totally accepting that we do not want to trample into areas that might have any partisan implication? Could I ask you to take that on notice and give some consideration to it?
Mr Bowen : I am happy to do that. In fact, I can tell you that, with one exception, the requests have all come from parties.
Senator FAULKNER: Are there really only two categories: parties and individuals or individual parliamentarians?
Mr Bowen : I think those are the two categories that I would be comfortable with.
Senator FAULKNER: You might, on an ongoing basis, be able to provide the committee with information. I think it would be useful for the committee over the years ahead to be able to monitor and understand the workload and also how that might change through the parliamentary cycle. I will leave that with you to give some consideration to.
I have another issue I want to briefly touch on. You mentioned in a very positive way your interface with agencies. You mentioned the ongoing issue you were working through in relation to the Australian Taxation Office. Firstly, was the bulk of that interaction with Treasury and the Department of Finance and Deregulation? That would seem logical, but I wonder whether that was the case.
Mr Bowen : If you combine the requests that we have given to Treasury and Finance, together they account for, in total, about 40 per cent, maybe a little more.
Senator FAULKNER: I am not asking you to speculate on this today, but you might consider whether any information can be provided on that engagement that, again, does not offend any principles of confidentiality. I might ask you to give some consideration to that, again, as we are starting to work through the committee developing and understanding the workload of the PBO. In relation to that extensive engagement with, particularly Treasury and Finance—and I will certainly ask the department of finance this when they appear before the committee—I assume from the generosity of your opening statement that some of this interaction is quite resource intensive in other agencies. Would that be right?
Mr Bowen : It is. Treasury and Finance, as I said, have received maybe 40 per cent of the requests. But there are a number of other agencies which have received quite a large number as well. We have to remember that I have to be sensitive; I have to try and get the information that we need, but I also have to be sensitive to the impact that we are having on other agencies.
That said, their responses have been very good across the board.
Senator FAULKNER: And timely?
Mr Bowen : Pretty timely! We have very few overdue requests at this point in time—very few.
Senator FAULKNER: But clearly, from what you have said there is no suggestion of non-cooperation—
Mr Bowen : No.
Senator FAULKNER: It is very much a cooperative relationship developing?
Mr Bowen : The relationship has been extremely cooperative to date, yes.
Senator FAULKNER: Thank you chair, and I thank the opposition senators for allowing me to ask those few questions.
CHAIR: It might be timely that before we go to the opposition we take our morning tea break.
P roceedings suspended from 10:26 to 10:40
Senator RYAN: Mr Bowen, you said in your opening statement you are currently at 20 permanent staff and four temporary staff.
Mr Bowen : Yes.
Senator RYAN: I understand you still have advertisements out there and you are still recruiting. What do you envisage the final arrangements to be and when do you imagine getting there?
Mr Bowen : We are budgeted for a core staff in the range of about 30 to 35. We were fairly successful, quite successful I think, in our first round of recruitment, which we completed before Christmas. We are really just embarking on the second round now so I would hope realistically within another couple of months that we should be pretty close if not at our core staff.
Senator RYAN: So when you are back at budget time you would expect to have your full staff?
Mr Bowen : I would expect to be there.
Senator RYAN: You also mentioned that you have the top echelons on the website. I have not checked that. Do you plan, when you have got those on-board, to publish a bigger set of boxes that indicate where the staff below the SES level are allocated?
Mr Bowen : I have not thought about that, to be honest. We do have those boxes internally. It is not usual for departments to post all of their staff on their website. Of course we are much smaller. We will look at that.
Senator RYAN: Even if it did not include names? Some of the issues I think Senator Faulkner was getting to was to try and get an idea of resource allocation and resource demands, and staff is a very good reflection of that.
Mr Bowen : Sure. One thing you have to bear in mind is that while we have a formal organisation structure at the top level and we will have permanent slots in the lower levels for individuals, we also will be quite flexible in how we use our staff. So whatever we publish at a point in time apart from the top levels should not be taken to mean that those people are fixed in silos because they will not be. They will be used very flexibly.
Senator RYAN: I appreciate that. Some other departments that come for estimates committees provide a periodic update knowing that it changes every time there is an estimates hearing to reflect resource allocation. It is a potential idea in that case.
Senator Faulkner was talking earlier about the number of requests from parties versus individuals. Excuse my ignorance if there is an easy answer to this, but how do you classify it as such? If Senator Cormann, as shadow Assistant Treasurer, put in a request—and I have no idea whether or not he did—does that get classified because he is an opposition front bencher as a party request or as a personal request?
Mr Bowen : That is a good question, I must say. I would classify requests from parties when they have been coordinated and provided by the party and it has been made clear that it is a particular party providing the request—as opposed to an individual—
Senator RYAN: Would that be a member of the elected leadership group of that party, or from a person who is just publicly recognised as—
Mr Bowen : No, it would be from the leadership group, and it would be put forward as a policy that that party wished us to cost or some work that the party wanted us to do. In practice it has been very clear, so my figures are quite clear. And, when it comes to an individual, that is clear too—in that particular case, anyway.
Senator RYAN: You mentioned earlier the work you are undertaking on the structural budget deficit. Do you have a time line on the publication of that?
Mr Bowen : We have a broad time line. There is a lot of preparatory work to do on that. Realistically we will be looking to do that this financial year but it will be after the budget. So we will have the latest budget data to use in the analysis and hopefully we can produce that after the budget but before the end of the financial year.
Senator RYAN: With the MOU that you have—and I understand that you obviously do a great deal of work with Treasury and Finance—do you only have access to budget data upon its publication, on Tuesday 14 May, or do you have access to what one might call evolving budget data in the lead-up to when it is printed?
Mr Bowen : It is a matter of practicality, in a way. We can and do seek unpublished budget information. In the lead-up to a budget, though, it may be very difficult and probably impractical to get significant budget updates until they become firm, which is pretty much budget time. But if there were, say after the budget, a significant change in some parameter we would expect to get that information.
Senator RYAN: Without implying that the information should be released, one of the issues we often explore here is financial decisions taken but not yet announced. Do you have access to those when you are doing your work? For example, with the structural budget deficit work, if there was to be a big announcement that had an impact on that, you would presumably like to know but it might not be announced by the time you get the data.
Mr Bowen : No. We would be looking for all data that would have a bearing on that type of analysis. I would imagine information of the type you are referring to would be given a cabinet-in-confidence classification. It would then be a matter for the department concerned to decide whether it was or was not information that they could provide to us. We would not know what to ask for explicitly in those circumstances presumably, because it would not have been announced. So, realistically, that is probably not information that we would get. I mentioned that we have quite a lot of preparatory work to do that will take a bit of time. Equally I think this study will be more meaningful after the budget than before.
Senator RYAN: Last time we had a discussion you outlined that you are required to use the latest budget parameters? Is that still the case?
Mr Bowen : We are. In the legislation, that is what we are required to use, yes.
Senator RYAN: So you are still relying upon the MYEFO update before Christmas?
Mr Bowen : Yes, we are.
Senator RYAN: And that is the basis for the work you are undertaking at the moment?
Mr Bowen : At the moment. But we will update our work as we get updated parameters.
Senator RYAN: There has been one public statement of an updated parameter, which was regarding the revenue from a particular tax. I notice that you had issues here dealing with the ATO. If something is publicly announced do you update the parameters you work on on that basis, or are you still required to use the MYEFO parameters?
Mr Bowen : We are required to use the latest economic parameters, but if there is later data than the published parameters—say, at MYEFO—that is reliable data, then we would use that data.
Senator RYAN: So it does not actually have to be a formal document? And you would provide your own judgement as to whether or not a public statement or a report qualified as some sort of update to the budget parameters?
Mr Bowen : We always would like to use as much actual data as we can get. As a guide to estimates going forward: if there is a change to the actual data and that is made public then clearly we would use that.
Senator RYAN: Sure. There is a report in today's newspaper that says you have been promised an extra $500,000. Is that true?
Mr Bowen : Well, it is true, but that was announced, I think, in the 2011-12 MYEFO—when the PBO was set up.
Senator RYAN: The extra $500,000 was announced? I must have missed that.
Mr Bowen : Yes, it was. In the measure that was announced in that year's budget papers, it was $6 million a year, but—roughly—an extra $500,000 in this election year.
Senator RYAN: So is that for 2012-13 or 2013-14?
Mr Bowen : For 2013-14.
Senator RYAN: We have had previous discussions about this. For example, is that for—if necessary—having outside contracts for particular modelling work or things that you might not either be able to upscale quickly or do in-house?
Mr Bowen : It is a surge capacity—funding for surge capacity, yes.
Senator RYAN: You mentioned you are in discussion with someone about potential amendments to the Taxation Administration Act. Who do you have those discussions with?
Mr Bowen : What I said was—and you would be aware, I think—that there are aspects of tax information that cannot be released because of taxpayer privacy considerations.
Senator RYAN: There has been some debate on it recently.
Mr Bowen : I understand there has. Some years ago Treasury gained an exemption through an amendment to the Taxation Administration Act, with quite strict conditions surrounding their receipt of this type of information. Essentially, it was purely for use in costings of revenue measures. We are working with Treasury and we are working with the tax office to find ways to be able to use the type of information that Treasury gets without actually breaching any privacy provisions.
In the short term, there are some workarounds that we all think are quite possible. In the longer term we are also looking at the issue of whether the PBO should have a similar exemption to Treasury, with similar obligations in confidentiality.
Senator RYAN: Sure. You mentioned in your opening statement that you are broadly comfortable with the operation of the MOU in gaining access to information from Commonwealth bodies—I will not use its full title.
Mr Bowen : Yes.
Senator RYAN: I think in response to a question you indicated that some agencies are naturally quicker than others—it could be due to the size of the request. Are you having issues with—and I do not expect you to name them—any particular departments or agencies that are slower than others? Are there other agencies that you have to make more than one or two reminder phone calls to?
Mr Bowen : I do not have the complete history of this, but some agencies have been slower than others, some agencies have received many more requests than others and it also comes down to the complexity of the information that we are seeking. Yes, there have been some delays which have affected our ability to respond quickly, but this situation has been improving all the time, I would have to say. There is quite an impost on agencies. They have not had to face these sorts of requests from a body like the PBO before.
Senator RYAN: This is where I wanted to go. Isn't the information you are requesting, if it is from a line agency which might be small without a lot of redundant resources which would make it easy to supply this, broadly similar to the requests they might get from Treasury and Finance as part of the budget cycle? If so, they would have to provide it to someone—you are a different person to provide it to, but it is not like they do not ever have to provide it.
Mr Bowen : Possibly you are right. It is information that they have. Quite often it is detailed information that they use for internal purposes and maybe do not provide elsewhere, but we are now asking for it so that we can do the detailed analyses. I would characterise most of the delay at this point as teething issues. I am not overly concerned. As I said I think in response to Senator Faulkner, we only have a very few requests—they are important requests—that are overdue. We have a number that are outstanding but they have timelines attached to them. But in terms of overdue, we have very few.
Senator RYAN: Are the timelines set—again, I am not sure if this is in the MOU?
Mr Bowen : It is.
Senator RYAN: Are they set?
Mr Bowen : Yes, but we do have to be somewhat flexible given the early stage of this exercise that we are in. Under the MOU we can seek information on urgent requests and put a five-day deadline, or routine is a 10-day deadline. It has been difficult for departments to meet those deadlines in some cases.
Senator RYAN: Are you considering reporting on whether the deadlines are met—not naming people yet, but for example at some point in estimates with the Parliamentary Library the behaviour of specific departments has been discussed. I am not saying we are there yet, but this would be roughly akin to the Parliamentary Librarian in some senses. Are you considering reporting a pretty simple metric on whether those two thresholds have been met percentage-wise?
Mr Bowen : I have not considered it explicitly, but we certainly will consider that.
Senator RYAN: At previous estimates you advised there are a couple of things you want the PBO to build up to reduce your reliance, particularly on Treasury and Finance. One was a bank of information that would allow you to cost your own cost requests and the other—which is similar but a little different—was to create economic models to model different scenarios, again without relying on Treasury and Finance quite as much. Have you commenced the building of those and are they accessible yet, or are you still in the building phase?
Mr Bowen : We have commenced. I may ask Colin Brown, who is head of the budget analysis division, to amplify this, but we have been getting models from departments. We have been, where necessary, doing modifications and putting in place arrangements for us to receive updates of departmental models as well as updates of the information bases that you need to use these models.
Mr Brown : We are seeking information from departments at a fairly detailed level of budget estimates to try to get information around, in particular, the largest budget programs so that we can put together a set of standing models that we can draw on for doing costings and providing budget information. We are looking to make those routine requests so that the information is periodically updated and kept up to date.
Senator RYAN: When do you think they will be at the point where you are content with them to be utilised? It sounds like you are still in the building phase, which is not entirely unreasonable given that you have to get access to fairly detailed information.
Mr Brown : We have made the requests for the information and we are building the models. I would expect that we would be in a reasonable position to be utilising those routinely by probably around budget time. It will take a little while; we are going into a particularly busy period for departments as well. The other thing is that the information will require updating after the next economic statement, which is the budget.
Senator RYAN: One last question on this: do you expect six-monthly updates in line with the budget cycle? Like you mentioned, these would have to be regularly updated.
Mr Brown : It would be at least that.
Senator RYAN: Thank you.
Mr Bowen : This process does not stop.
Senator RYAN: I appreciate that.
Mr Bowen : We are in the early phase, but it will be an ongoing maintenance.
Senator RYAN: I appreciate that, but there is obviously a more difficult task at the commencement
Mr Bowen : Yes, that is true.
Senator CORMANN: I go to the question of departmental delays in meeting deadlines under the MOU. How is that impacting on your ability to turn over costing requests in a timely fashion? Can you talk us through the specifics of that.
Mr Bowen : Sure. It has had an impact on some costings—on our ability to respond in a timely way to some requests. There is no doubt about that. But, as I said, we now have very few overdue information requests. Some of the ones we are still waiting for are quite important.
Senator CORMANN: So for the important ones that you are waiting for you have not been able to provide information on costings because departments like Treasury, Finance and others have not provided you with the data that under the MOU they are required to provide you with?
Mr Bowen : Not yet.
Senator CORMANN: How overdue are those departments in the context of the deadlines that they should comply with under the MOU?
Mr Bowen : I think there were some requests that are still outstanding from late December.
Senator CORMANN: Nothing from November that is still outstanding?
Mr Bowen : I believe not.
Senator CORMANN: You might want to take that on notice.
Mr Bowen : Okay. I will check that, but my understanding was December.
Senator CORMANN: What is the average turnaround time that you expect for policy costing requests during the caretaker period?
Mr Bowen : From memory, during the caretaker period, again, five days is the figure.
Senator CORMANN: If you do not get timely feedback from Treasury and Finance, though, how is that going to impact on your capacity to do your job?
Mr Bowen : If we do not get timely feedback on any information request, wherever it comes from, that will affect our ability to respond in a timely fashion.
Senator CORMANN: What is the average turnaround time taken by the Parliamentary Budget Office to date on policy costing requests?
Mr Bowen : I would have to take that one on board—
Senator CORMANN: You do not have an indicative high level—
Mr Bowen : To be fair to the accuracy of the answer, I think I would have to look at the statistics, and I have not done that.
Senator CORMANN: If there are requests from December, that is a couple of months.
Mr Bowen : That is an outlier, well and truly.
Senator CORMANN: An important outlier.
Mr Bowen : They are all important, I guess, and these are, but that is very much an outlier.
Senator CORMANN: As you have said this morning, you have been doing a large number of policy costings for various parties. Those costings are based on information presumably in the budget and so on, as you have said. What would be the latest available information which you could base your costings on prior to an election?
Mr Bowen : Prior to an election is the PEFO report.
Senator CORMANN: So until the pre-election economic and fiscal outlook is available it would not be possible to conclusively finalise pre-election costings.
Mr Bowen : As I mentioned in my opening statement, an approach that we would encourage is to have a policy submitted to the PBO that senators and members wish to give the PBO prior to the caretaker period, well in advance of the caretaker period, so that we can cost those policies with the best information to that point in time, with then if need be an update being requested during the caretaker period. It would be much quicker and easier for us to update the costing that we had previously costed on a confidential basis.
Senator CORMANN: I am sure that to a degree that is happening, but as a general rule, while it might be quicker and easier for you, if you look at how budget positions have deteriorated in the recent past from budget to MYEFO to the next budget, chances are that the information in PEFO will be quite different from the information in the budget a couple of months earlier. Isn't it fair to say that responsibly we cannot finalise costings in the lead-up to an election until such time as we have got the most recently available data which is in the pre-election economic and fiscal outlook?
Mr Bowen : Each of the costings that we prepare has an expiry date on it. Quite often that expiry date is now being the 2013-14 budget. It does not mean to say, though, that every costing with an expiry date of the coming budget will change dramatically. Some may but some may not. There are many factors, as you know, that will impact on a costing that are not simply impacted by a change in an economic parameter.
Senator CORMANN: Picking up on your point, though, every costing comes with an expiry date. Current costings come with an expiry date of the 2013-14 budget.
Mr Bowen : Most.
Senator CORMANN: And costings beyond that time presumably come with an expiry date of the pre-election economic and fiscal outlook. Isn't it fair to say then, though, that the most accurate information to base the most reliable pre-election costings on would be based on the data contained in the pre-election economic and fiscal outlook?
Mr Bowen : That is true, but I would also reiterate that for us to do a costing from scratch will take a lot more work, time, effort—
Senator CORMANN: I understand the logistical challenge that you are facing. What you are saying is that you would like to be able to do as much work as possible now so that it will be as informed as possible now. But ultimately in terms of having an accurate reflection of what the costing of a policy is pre-election, I think we have now agreed that until such time as we have got the most recently available fiscal data pre-election we will not really be able to conclusively finalise that. But I appreciate where you are coming from. For workflow purposes, you want to be able to do as much of it now so that you do not have to scramble in a short and tight election period with too much at the same time.
Mr Bowen : The problem for us will be that if we have to do every costing from the ground up during the caretaker period, we just may not physically be able to do all of the costings. If we have costed them previously, then we will have the models, much of the physical data will not be changed and we can update for any economic variables that have changed. That is the reason we are asking to have the opportunity to cost early and then update during the caretaker period.
Senator CORMANN: From our point of view, we would want to make final judgements on policy prioritisation once we know the objective and independent data out of the Treasury and Finance rather than information provided by the government. How long will it take to update policy costings after the publication of PEFO?
Mr Bowen : That will depend on the nature of the costings and the extent to which the costings are influenced by the economic parameters set out in the PEFO. If the models are there, we have done the costings and we have to simply change one or two variables, then it should be a much simpler exercise than the earlier costing. That is about as much as I can say.
Senator CORMANN: Going back to something that you said a little bit earlier in relation to this, obviously now the work is confidential. However, after the election and during the caretaker period, any updates on costings will be publicly released. Can you talk in more specific detail around the timetable of this? You will receive a request to update a costing, but what happens after that from your point of view?
Mr Bowen : An update to a costing will be treated equivalent to a costing request. For example, you may put in a costing update request, and we would have to make the request public and then make our costing update public as well.
Senator CORMANN: On the spot?
Mr Bowen : I think, under the legislation, we have to announce the receipt of the costing request, and as soon as practicable we have to announce our costing publicly.
CHAIR: We now call forward the Department of Parliamentary Services.