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Parliamentary Service Amendment (Post-election Report) Bill 2018



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ISSN 1328-8091

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BILLS DIGEST NO. 52, 2018-19 6 FEBRUARY 2019

Parliamentary Service Amendment (Post-election Report) Bill 2018 Joseph Ayoub Law and Bills Digest Section

Contents

Purpose and structure of the Bill ..................................... 2

Background ..................................................................... 2

Post-election report .................................................... 2

Parliamentary Budget Office independent review ..... 3 Committee consideration ................................................ 4

Senate Standing Committee for the Scrutiny of Bills .............................................................................. 4

Senate Standing Committee for Selection of Bills ...... 4 Joint Committee of Public Accounts and Audit .......... 4 Policy position of non-government parties/independents...................................................... 5

Position of major interest groups..................................... 5

Financial implications ...................................................... 5

Statement of Compatibility with Human Rights................ 6

Parliamentary Joint Committee on Human Rights ..... 6 Key issues and provisions ................................................ 6

Concluding comments ..................................................... 7

Date introduced: 5 December 2018

House: House of Representatives

Portfolio: Finance

Commencement: Upon Royal Assent

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at February 2019.

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Purpose and structure of the Bill The purpose of the Parliamentary Service Amendment (Post-election Report) Bill 2018 (the Bill) is to amend the Parliamentary Service Act 1999 to change the deadline for the publication of the post-election report of election commitments which is published by the Parliamentary Budget Officer following a general election.

These changes are made by Schedule 1 to the Bill.

Background

Post-election report Section 64MA of the Parliamentary Service Act requires the Parliamentary Budget Officer to prepare and publish a post-election report for a designated parliamentary party which sets out the impacts that a party’s election commitments will have on the Commonwealth budget.1 A designated parliamentary party is a political party with at least five members who were members of Parliament immediately before the caretaker period.2

The post-election report must include:

• costings of all the election commitments of a designated parliamentary party that the Parliamentary Budget Officer, in their best professional judgement, reasonably believes would have a material impact on the Commonwealth budget estimates for the current financial year and the following three financial years and

• for each designated parliamentary party, the total combined impact those election commitments are likely to have on the Commonwealth budget estimates for the current and following three financial years.3

The Parliamentary Budget Officer must prepare the report before the end of 30 days after the caretaker period and publicly release it ‘as soon as practicable, but not later than 30 days after the end of the caretaker period’.4 The caretaker period begins at the time the House of Representatives is dissolved and continues until the election result is clear or, if there is a change of government, until the new government is appointed.5

As the Parliamentary Budget Office (PBO) was established in 2012, only two post-election reports have been completed—following the 2013 and 2016 general elections. The 2013 post-election report was publicly released on 18 October 2013, however Parliament did not return until 12 November 2013.6 The 2016 post-election report was released on 5 August 2016 while Parliament returned on 30 August 2016.7

1. Parliamentary Service Act 1999, subsection 64MA(1). 2. Ibid., definition of designated parliamentary party contained in section 7. Under subsection 64MA(2) of the Parliamentary Service Act, the Parliamentary Budget Officer may treat two or more political parties as a single designated parliamentary party if, together, they would have been a designated parliamentary party and the parties request the

Parliamentary Budget Officer to do so. 3. Ibid., subsection 64MA(1). 4. Ibid., subsections 64MA(1) and 64MC(1). 5. Department of the Prime Minister and Cabinet (PM&C), Guidance on caretaker conventions, PM&C, Canberra, 2018, p. 1. 6. Parliamentary Budget Office (PBO), Post-election report of election commitments: 2013 general election, PBO, Canberra, 2013,

p. v; Australia, House of Representatives, ‘Meeting of the House’, Votes and proceedings, 1, 12 November 2013, p. 1. 7. PBO, Post-election report of election commitments: 2016 general election, Canberra, 2016, p. v; Australia, House of Representatives, ‘Meeting of the House’, Votes and proceedings, 1, 30 August 2016, p. 1.

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Parliamentary Budget Office independent review In 2016 and in accordance with the requirements of the Parliamentary Service Act,8 the Joint Committee of Public Accounts and Audit (JCPAA) initiated an independent review of the PBO which was carried out by Dr Ian Watt, former Secretary of the Department of Prime Minister and Cabinet and Mr Barry Anderson, former Deputy Director of the US Congressional Budget Office.9 The independent review’s report, Parliamentary Budget Office review 2016-17: report of the independent review panel (Report) was provided to the JCPAA on 17 March 2017.

The Report recommended that the publication of the post-election report should be delayed to the later of the first sitting day of Parliament following a general election or 30 days after the return of the writs.10 The recommendation was made in response to stakeholder concerns that, while the post-election report ‘served as an important source of fiscal discipline on parliamentary parties in the election’, it has ‘received little attention’:11

Many stakeholders were not aware of the Post-election Report’s existence. Others noted that, while a worthy document (and a potentially valuable resource for commentators and academics), both the 2013 and 2016 Post-election Reports received little media and public attention, and had virtually no impact on the public policy debate relative to the amount of work put into their publication.

Some stakeholders considered that this reflected the timing of the Post-Election Report: it is released after a general election but usually before parliamentary sittings resume, at a time when interest in the detail of commitments (apart from the Government’s) made in the run up to the election is at a very low ebb. [Emphasis added]

12

In addition to the timing change to the post-election report, the Report also recommended that the post-election report should include the financial impact over the medium term of:

• the top ten policy proposals by dollar value

• any proposal with an impact of over $1 billion in a year

• proposals with a materially different impact beyond the forward estimates and

• the overall election platform for each political party.13

The Report further recommended that the PBO should allow political parties with fewer than five parliamentary members with the option to have the financial impacts of their election commitments included in the post-election report.14

According to the Explanatory Memorandum, the latter two recommendations do not require legislative change and ‘the Parliamentary Budget Office is already working to implement these changes to the scope of the report’.15 The additional time provided by the proposed amendment is

8. Following a general election, subsection 64T(1) of the Parliamentary Service Act enables the Joint Committee of Public Accounts and Audit (JCPAA) to request that the Parliamentary Budget Officer cause a review of the operations of the PBO. 9. JCPAA, Independent review of Parliamentary Budget Office, media release, 29 March 2017, p. 1. 10. I Watt and B Anderson, Parliamentary Budget Office review 2016-17: report of the independent review panel, Canberra,

March 2017, recommendation 12, p. 43. 11. Ibid., p. 41. 12. Ibid., p. vi. 13. Ibid., recommendation 11, pp. 42-3. On 3 October 2018 the PBO published PBO Guidance 02/2018: post‐election report of

election commitments: medium‐term reporting, outlining how the PBO will include the medium‐term financial impacts of election commitments in the post‐election report. 14. Ibid., recommendation 13, p. 44. On 27 April 2018, the PBO published PBO Guidance 01/2018: allowing minor parties to opt in to the PBO’s post-election report of election commitments, outlining how minor parties can opt-in. 15. Explanatory Memorandum, Parliamentary Service Amendment (Post-election Report) Bill 2018, p. 1.

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intended to also ‘help accommodate the additional work being undertaken by the Parliamentary Budget Office’.16

The PBO also agreed with the Report’s recommendations. The actions taken by it in relation to each recommendation can be found in the Parliamentary Budget Officer’s letter to the JCPAA dated 30 April 2018.17

Where a minor party opts-in to have their election commitments assessed, the PBO has stated that it will release an ‘addendum containing the financial implications of the election commitments of those minor parties as soon as possible after the release of the main report’.18 However, the provisions which govern the post-election report, namely sections 64MA and 64MAA of the Parliamentary Service Act do not appear to enable the Parliamentary Budget Officer to include minor parties’ election commitments in the post-election report, unless two or more minor parties elect to be treated as a single designated parliamentary party under subsection 64MA(2).19

In this respect, it appears that the Government is relying on the Parliamentary Budget Officer’s general functions as outlined in section 64E of the Parliamentary Service Act in order to include the impact of minor parties’ election commitments on the Commonwealth budget as an addendum to the post-election report. While the Parliamentary Budget Officer considers that a legislative change is not required to give effect to this, it is unlikely that the assessment of minor parties’ election commitments would be governed by the procedural and reporting requirements of sections 64MA and 64MAA of the Parliamentary Service Act.20

Committee consideration

Senate Standing Committee for the Scrutiny of Bills At the time of writing, the Senate Standing Committee for the Scrutiny of Bills had not considered the Bill.

Senate Standing Committee for Selection of Bills The Senate Standing Committee for Selection of Bills deferred consideration of the Bill until its next meeting.21

Joint Committee of Public Accounts and Audit Following a general election, subsection 64T(1) of the Parliamentary Service Act enables the JCPAA to request that the Parliamentary Budget Officer cause a review of the operations of the PBO. As

16. Ibid., p. 2. 17. Letter from the Parliamentary Budget Officer to the JCPAA dated 30 April 2018, Parliamentary Budget Office implementation of recommendations: report of the independent review panel - March 2017, 30 April 2018, pp. 3-9. 18. PBO Guidance 01/2018: allowing minor parties to opt in to the PBO’s post-election report of election commitments, op cit.,

p. 3.

19. Subsection 64MAA(4) of the Parliamentary Service Act states that the post-election report ‘must not include costings of election commitments other than … those in the list prepared by the Parliamentary Budget Officer under subsection 64MA(5)’. Subsection 64MA(5) only refers to costings of a ‘designated Parliamentary party’ and as noted in footnote two of this Digest, ‘designated Parliamentary party’ means ‘a political party at least 5 members of which were members of the Parliament of the Commonwealth immediately before the caretaker period’. While subsection 64MA(2) allows the Parliamentary Budget Officer to treat two or more parliamentary parties as a single designated parliamentary party should the parties choose to, the proposed addition to include individual minor parties as an addendum to the post-election report does not appear to fall within the ambit of sections 64MA and 64MAA of the Parliamentary Service Act.

20. Parliamentary Budget Office implementation of recommendations: report of the independent review panel - March 2017, op. cit., p. 2. 21. Senate Standing Committee for the Selection of Bills, Report, 15, 2018, The Senate, Canberra, 6 December 2018, p. 4.

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noted above, the JCPAA initiated an independent review of the PBO in 2016.22 According to the Explanatory Memorandum, the JCPAA and the Presiding Officers ‘have agreed to the change in timing for the publication of the report’.23

Policy position of non-government parties/independents It does not appear that any particular views have been expressed on the proposed changes.

Position of major interest groups The independent review consulted with a range of stakeholders when conducting its inquiry including parliamentarians, Commonwealth government departments and agencies, external think tanks, journalists and various economic development agencies—a full list of stakeholders involved is available at Appendix G to the Report.24 It appears that consultation occurred generally and no submissions as such are available.

While some stakeholders considered that the post-election report ‘served as a source of fiscal discipline on parliamentary parties in the election’, there was also ‘general agreement’ that it is ‘not as useful for public policy debate as it might be’.25 Accordingly, it appears that reforms intended to increase the impact that the post-election report has on the public policy debate would likely be welcomed.

Notwithstanding this position, Professor Sinclair Davidson writing for The Conversation argued in August 2016 that the post-election report ‘won’t hold any political party to account, nor provide any additional transparency to the electoral process’.26 Davidson’s criticism is primarily levied on the basis that the post-election report is published after the election while voters are ‘forward-looking’ and he also argues that the ‘costings simply determine if the numbers are correctly calculated, not whether the policy is plausible or even sensible’.27

Financial implications According to the Explanatory Memorandum, ‘the Bill has no financial impact as it only changes the timing of the publication of the report’.28 In relation to the inclusion of minor parties’ election commitments in the post-election report, former Parliamentary Budget Officer Phil Bowen stated in 2017 Senate Estimates it ‘would not only take resources to do that but also you would expect that it would involve more time as well’.29

The PBO also receives additional funding of approximately $500,000 in an election year.30 The Report notes that the election year funding ‘is subject to the effects of indexation and efficiency dividend impacts for three years prior to being available to the PBO in the expected year of the election’. It appears that the PBO received additional funding in the 2018-19 budget in anticipation of a 2019 general election.31

22. Parliamentary Service Act, subsection 64T(1). 23. Explanatory Memorandum, Parliamentary Service Amendment (Post-election Report) Bill 2018, p. 1. 24. Parliamentary Budget Office review 2016-17: report of the independent review panel, op. cit., pp. 105-6. 25. Ibid., p. 41. 26. S Davidson, ‘Latest PBO costings won't hold any parties to account’, The Conversation, 5 August 2016, p. 1. Professor Davidson

is Professor of Institutional Economics at RMIT and a fellow with the Institute of Public Affairs. 27. Ibid., pp. 1-2. 28. Explanatory Memorandum, Parliamentary Service Amendment (Post-election Report) Bill 2018, p. 1. 29. Senate Finance and Public Administration Legislation Committee, Official committee Hansard, 22 May 2017, p. 47. 30. Parliamentary Budget Office review 2016-17: report of the independent review panel, op. cit., p. 45. 31. Ibid., p. 94; Australian Government, Agency resourcing: budget paper no. 4, 2018-19, p. 33.

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Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible as it does not raise any human rights issues.32

Parliamentary Joint Committee on Human Rights At the time of writing, the Parliamentary Joint Committee on Human Rights had not yet considered the Bill.

Key issues and provisions Item 1 of Schedule 1 to the Bill repeals the current deadline, contained in subsection 64MA(1) of the Parliamentary Service Act, by which the Parliamentary Budget Officer must prepare the post-election report.

Item 2 of Schedule 1 inserts proposed subsection 64MA(1A) into the Parliamentary Service Act and specifies the new deadline by which the Parliamentary Budget Officer must prepare the post-election report before the later of:

• 30 days after the end of the caretaker period and

• seven days before the first sitting day of either or both Houses of Parliament.

Item 4 of Schedule 1 repeals subsection 64MC(1) of the Parliamentary Service Act which contains the current deadline by which the Parliamentary Budget Officer must publicly release the post-election report and inserts a new deadline. Proposed subsection 64MC(1) of the Parliamentary Service Act requires the Officer to publicly release the post-election report as soon as practicable after preparing the report and before the later of:

• 30 days after the end of the caretaker period and

• seven days before the first sitting day of either or both Houses of Parliament.

According to the Explanatory Memorandum, it is expected that the post-election report would generally be published seven days prior to the resumption of Parliament:

Based on timeframes of previous elections, it is likely that the post-election report would generally be required to be published by seven days before the resumption of Parliament following a general election. This is because this date generally falls later than 30 days after the end of the caretaker period.

33

Subsections 64MB(2) and (3) of the Parliamentary Service Act enable the Parliamentary Budget Officer to request information from a Commonwealth body to help the Parliamentary Budget Officer prepare the post-election report up until 30 days after the caretaker period. Item 3 of Schedule 1 amends subsection 64MB(3) to enable the Parliamentary Budget Officer to make such a request up until the day on which the post-election report is publicly released under proposed subsection 64MC(1) of the Parliamentary Service Act.

32. The Statement of Compatibility with Human Rights can be found at page 2 of the Explanatory Memorandum to the Bill. 33. Explanatory Memorandum, Parliamentary Service Amendment (Post-election Report) Bill 2018, p. 4.

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Concluding comments The Bill makes minor amendments to the Parliamentary Service Act to enable the Parliamentary Budget Officer to publish the post-election report closer to the resumption of Parliament. The Explanatory Memorandum states that the delayed publication ‘is not only intended to accommodate the changed scope of the report’, but also expects that it will ‘enhance the visibility of the post-election report by moving the timing closer to the resumption of parliamentary sittings’.34

The proposed changes implement a recommendation of the 2016 independent review of the PBO and may encourage greater scrutiny of the budgetary impact of parties’ election commitments following a general election.

34. Ibid., p. 1.

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