I commend the amendments. Although the funding was allocated in this year's budget for a PBO, we are now almost three months down the road in the financial year and only now beginning to debate the policy in earnest. It will be astonishing if the PBO is up and running by the end of this year.
Almost everything the government touches ends up turning sour. The only reason we are debating the bill this week is that the coalition has introduced its own PBO legislation. We on this side of the House believe that the government's bill is deeply flawed, and that is why we are pushing for a number of amendments. On this point it is worth examining the differences between the two pieces of legislation and, in order to do so, we need to reflect on the motivation for creating a PBO in the first place. The PBO is a necessary reform to ensure transparency and integrity of budgetary and fiscal processes. In short, it levels up the playing field between government and non-government members by giving them equal ability to scrutinise government policy and to evaluate their own policies. If it is to be anything more than a paper tiger, the PBO needs the power to obtain relevant information from government departments; it needs the flexibility to perform whatever analysis it sees fit; and, most importantly, it needs to provide a level of discretion to allow members and senators to retain control of their own policy. It is there, at the first hurdle, that the government's policy falls down. Under the government's proposal, the PBO is unable to prepare economic forecasts or budget estimates. Why and how is the PBO supposed to prepare accurate analysis of the budgetary impacts of policy over the longer term?
This bill also restricts the PBO from using any economic data prepared by a third party in its determinations, as mentioned by the member for North Sydney earlier. Data from the Reserve Bank and ABARES could not be used in a determination. Instead it can only rely on information provided by the Treasury and the Department of Finance and Deregulation. Again, why? What is the purpose of limiting the scope of the PBO's research to such an extreme degree? How can the PBO be expected to fulfil its full mandate with one arm tied behind its back?
Unfortunately, the problems do not end there. The government's bill severely restricts the PBO's powers to gather information by requiring it to enter into an agreement with the relevant departments to determine what information they can get and when they can get it. The PBO will have nothing to trade with during the negotiation of these agreements, so it stands to reason that any agreement entered into by the government departments will be heavily biased in favour of the departments in question rather than the PBO. In short, what we are looking at here is a Clayton's PBO: it is the PBO you have when you do not have a PBO.
The coalition's policy does not contain any of these rather obvious shortcomings. Instead the PBO, as envisaged by us, will have considerable powers to obtain information from government departments. These powers will be based more on the powers of the Auditor-General and will ensure the PBO is a much more effective body than the diluted version being offered by those opposite.
Of course, one of the most significant functions of the PBO will be to prepare costings, yet even here the government's bill has some rather strange provisions. For instance, during caretaker periods the costings facilities available to members and senators is different from those available at other times. Indeed, during election campaigns the costings functions provided by the PBO would be identical to those already provided to the opposition under the existing Charter of Budget Honesty. So, again, I find myself asking why. What is the reason for this differentiation and what is the point of this duplication?
The Charter of Budget Honesty was a groundbreaking reform, but unfortunately the costings process provided under the charter are not confidential. In fact, they are exactly the opposite. As it stands, not only are requests for costings immediately published on the website of both Treasury and the Department of Finance and Deregulation but also the results of the said costings are made available in the same way. Perhaps this is a belated attempt from the Prime Minister to live up to her promise last year to draw the curtains back and let the sun shine in. But perhaps not.
In conclusion I believe the government's bill is deeply flawed. The bill provides the PBO with insufficient power to gather the information it needs to do the job, it makes insufficient provisions for discretion and it is structured in such a way that it protects the interests of the government of the day rather than the interests of budgetary transparency and its fiscal integrity.
