Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011

I am pleased to have the opportunity to speak on the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2011. This bill amends the Parliamentary Service Act and the Charter of Budget Honesty Act. The question before the House this afternoon is not whether it is a good idea to have a parliamentary budget office. We are all united in the view that to have a parliamentary budget office is a good idea, and I am very pleased to join the member for Lyne in saying that. Nor is the question whether there is a good case to have an extra source of independent advice to the parliament on financial and budgetary matters. That is clearly a good idea.

The question before the House is simply this: does the bill before the House contain practical measures which live up to the principles that we have all expressed our support for?

Establishing a parliamentary budget office was, after all, a key election commitments by the coalition. On this side of House we are very clear in our support for the principles. Those who have not had painful experience with this government might naively assume that, because this government has brought forward a bill purporting to establish a parliamentary budget office, this government is also committed to the principle and has implemented through the bill detailed measures which will give effect to an independent source of advice to the legislative branch of government in relation to financial and budgetary matters. Some might say that this is a case of the marketplace of ideas at work—the coalition's idea of a parliamentary budget office being taken up by the government consistent with the agreement that was reached with the Independents approximately one year ago.

I am sorry to say, however, that long and bitter experience of dealing with this government, particularly this Treasurer, requires very detailed scrutiny of the measures contained in the bill before one can be satisfied that those measures do indeed, in their totality, give effect to a scheme which will implement the principles that have been agreed to. It is noteworthy that we have had a series of speeches from Labor members of the House about the principle of a parliamentary budget office. That is not the question before us. Nobody is disputing the principle. The question before this House is whether the specific measures contained in the legislation we are considering will be of practical utility in providing effective independent advice to the legislative branch of government in relation to budgetary and financial matters.

I am sorry to say that there are good grounds for believing that the government's strategy here is to roll out something which claims to achieve worthy objectives but, on closer scrutiny, does not do so. One might well ask why it has taken a year before this legislation was introduced when an agreement in principle was reached between the government and Independents one year ago. Certainly that delay in timing adds to the degree of intelligent scepticism which we on this side of the House bring to our consideration of this bill.

I want to make three points in the brief time available to me. The first is to endorse the principle that a parliamentary budget office can improve the functioning of the legislative branch of government. The second is to point out that on the details of this piece of legislation there are specific flaws in what has been proposed. Third, I want to make the point that the coalition has suggested specific changes which could be achieved through either supporting the private member's bill introduced by the member for North Sydney or by accepting amendments to be moved by the coalition.

Let me turn to the first point, that as a matter of principle a parliamentary budget office can improve the functioning of the legislative branch of government. The executive branch, the Prime Minister and her ministers, have all of the resources of the bureaucracy available to them—all of the great departments of state, with their many thousands of employees. Those resources, when it comes to financial and budgetary matters, and when it comes to other matters, are not available to the legislative branch. That is so under the separation of powers doctrine which governs the operation of government in Australia and that of other countries derived from the Westminster system. Yet the legislative branch has crucial functions in our system of government. If it is to discharge those functions effectively it makes sense for it to have available to it expert advice on budgetary and financial matters.

If legislators, if members of parliament, do not have available to them an authoritative, a trusted and a confidential source of advice to assist them in understanding the costs and revenues associated with proposed and current policy measures then they are operating at a significant disadvantage. The establishment of a parliamentary budget office could cure that disadvantage. It is for that reason that in jurisdictions such as the United States and Canada there are similar offices in operation. One need only look at the broad range of issues confronting this parliament today to identify many areas where it would be enormously helpful to have available independent and impartial advice on such matters. It would be enormously useful to know whether the accounting treatment of the National Broadband Network, under which some $19 billion is to be spent by 2015—none of which is included in the published budget deficit figures—is in fact a valid accounting treatment. It would be of enormous value for the legislature to have available to it independent advice on that matter. It would be of great utility to have independent advice as to the credibility of the projected $3.5 billion surplus, which we keep being told is something that we can confidently expect to roll around, not this financial year but next financial year, following only four years of yawning, gaping and repeated deficits. It would be of tremendous value to know whether this claimed sliver of a surplus, promised in the future, is in fact something to which any credibility at all can be attached. It would be of enormous value to know whether the extraordinary increase in tax revenues projected in the documentation issued by this government is credible, because of course if it is not credible then every aspect of this government's fiscal strategy is shown to be deeply wanting.

Such advice would be of great value to all parties but particularly of value, first of all, to the opposition and, second of all, to the Independents and minor parties who may not otherwise have available to them credible advice on these kinds of matters. If a parliamentary budget office is to be effective in achieving its stated objectives, then there are certain key requirements that must be met. Its independence must be beyond question and any parliamentarian who goes to this office seeking advice must have confidence that the advice that he or she requests will remain confidential. If there is any degree of suspicion that the request for advice or the substance of the advice that was provided is going to end up on the front page of a newspaper the next day, then all confidence in that office and in reliance upon it will be lost.

This office and the services provided by it must be available at all stages of the electoral cycle, including most importantly during the course of elections rather than, as is mysteriously proposed, having the availability of confidential advice turned off during the caretaker phase—that is to say, during the election process. This office must have the resources and powers available to it to get the information that it needs. Finally, if it is to be meaningful, it must do more than simply replicate arrangements which are already available—for example, under the Howard government's path-breaking Charter of Budget Honesty reforms.

I turn to the next point I wish to make, which is that there are key flaws in what is proposed in the legislation before the House this afternoon. The Parliamentary Budget Office will not have real independence from Treasury and Finance—those great departments of state—because the Parliamentary Budget Office will be required to make arrangements in writing under section 64F to obtain information from those departments and others. Remarkably, the Parliamentary Budget Office is prevented from preparing economic forecasts and budget estimates. This is a truly novel and ingenious approach to the concept of a parliamentary budget office—it is not allowed to prepare budget estimates! It would open exciting new possibilities in legislation if we were to replicate this approach in other areas. We could establish a defence department which was not allowed to defend Australia, a health department which was not allowed to take action to promote health or a department of veterans' affairs which was not allowed to deal with anybody who is a veteran of war service! These suggestions are as self-evidently ludicrous as it is self-evidently ludicrous that a parliamentary budget office would be specifically prevented from preparing economic forecasts and budget estimates.

I have already spoken about one of the other gaping flaws in this legislative scheme—that is, there is no confidentiality connected to the advice provided by this office during election periods. This is the very time when it is most critical to ensure that the Parliamentary Budget Office is available to serve as a trusted resource to parliamentarians. If we are to improve the quality of policy proposals put forward by non-government parties, which is surely an important objective in having a parliamentary budget office, then preserving confidentiality is an absolutely critical requirement. Of course, there are also serious flaws in the fact that the Parliamentary Budget Office is limited in its powers to obtain information. It is required to make arrangements in writing with the head of a Commonwealth body to get information and documents. What is left unclear and unspoken is: what is to happen if the relevant body refuses or imposes unacceptable terms? I want to put to the parliament the not-particularly-surprising suggestion that departments may well be resistant to providing information on an open-book basis. Therefore it is important to have appropriate measures in this legislation to ensure that the Parliamentary Budget Office can get the information it needs to do its job properly.

The third point I wish to make in the time remaining to me is that the approach proposed by the coalition in the private member's bill introduced by the member for North Sydney and, alternatively, in the form of the amendments which we are going to move is much more sensible. Under our model, the Parliamentary Budget Office is an independent statutory authority with strong powers to obtain information from government departments and agencies and the power to provide analysis of economic forecasts and budget estimates. There will be no need to sign memoranda of understanding with government departments. We are empowering a parliamentary budget office under our model to provide objective and impartial advice and, most importantly, to maintain confidentiality during election campaigns so as to ensure its effectiveness as a source of objective and reliable advice and in turn to improve the quality of policy proposals that come forward.

The issue before the House is not the principle; we are all in support of the principle of a parliamentary budget office. The issue is the specific deficiencies in the bill before the House. The coalition has brought forward changes to correct those deficiencies.