Wednesday, 23 March 2011
Parliamentary Budget Office Committee; Report
I present the report of the Joint Select Committee on the Parliamentary Budget Office on the proposed Parliamentary Budget Office, together with the Hansard record of proceedings and submissions received by the committee.
Ordered that the report be printed.
That the Senate take note of the report.
I present the report of the joint select committee on the Parliamentary Budget Office entitled Inquiry into the proposed Parliamentary Budget Officenot a very exciting title, I would have to admit, but nevertheless a very important report.
The committee was appointed by the parliament to consider the proposal to establish a Parliamentary Budget Office or PBO. The Agreement for a better parliament provided that the PBO ‘be established, based in the Parliamentary Library, to provide independent costings, fiscal analysis and research to all members of parliament, especially non-government members.’ In addition, the agreement provided that the ‘structure, resourcing and protocols for such an office be the subject of a decision by a special committee of the parliament which is truly representative of the parliament.’ The membership of the committee consisted of senators and members of the Australian Labor Party, the Liberal Party of Australia, the Nationals, the Australian Greens and an Independent member of parliament. Committee members not only considered matters raised in submissions and public hearings but also represented the views of their party colleagues.
In line with its terms of reference, the committee looked beyond the scope of the Agreement for a better parliament and examined various successful aspects of international PBO models. In so doing, the committee considered a broad range of services and possible structures for the PBO, with the aim of creating a PBO framework which could serve the Australian parliament effectively.
Key values underpinning the joint select committee’s recommendations included incorporating mechanisms into the PBO which could enhance transparency of process, ensure equality of access to its services and maintain independence. The committee found that the establishment of a PBO is warranted as the most practical way to provide high-quality research and analysis on fiscal policy and budget related matters to the parliament. The committee recommended that the mandate of the PBO be to inform the parliament by providing independent, non-partisan and policy neutral analysis on the full budget cycle, fiscal policy and the financial implications of proposals. In line with this mandate, the committee recommended that the main functions of the PBO should be: to respond to the requests of senators, members and parliamentary committees; formally contribute to committee inquiries; publish self-initiated work; and prepare costings of election commitments.
The committee found that the election costings provisions of the Charter of Budget Honesty Act have significant shortcomings in enabling the electorate to be better informed about the financial implications of election commitments. As a result, the quality of political debate during the election period is lessened as voters go without an independent and potentially very valuable source of information. The committee has recommended new measures to provide incentives for parties to use a costings process for the purpose of enhancing transparency and accountability of policies and better informing the wider community. These new measures include amending the Charter of Budget Honesty Act to enable minor parties to access the existing election costings process, while also providing an alternative source of costings through the PBO.
In line with international best practice, the committee has recommended that the position of Parliamentary Budget Officer be created as an independent officer of the parliament. In this way, the Parliamentary Budget Officer and their office will more clearly serve the ongoing financial information and scrutiny needs of the parliament as a whole, thereby enhancing fiscal transparency and executive accountability in the longer term.
Related recommendations in the report seek to further strengthen the ability of the PBO to provide independent and robust analysis. These include: provisions to assist the PBO to access information held by government departments; the appointment, dismissal and remuneration arrangements for the Parliamentary Budget Officer; and mechanisms for the oversight of the Parliamentary Budget Office by the Joint Committee of Public Accounts and Audit.
On the committee’s behalf, I would like to acknowledge and thank the government agencies, parliamentary departments and other organisations and individuals who contributed their expertise and time to this inquiry. In particular, I thank international organisations, with a special mention of the Canadian Parliamentary Budget Officer and his staff, who shared their experience and their knowledge with the committee and made themselves available to the committee at short notice. I also extend my thanks to committee members for actively participating in this inquiry and shaping the recommendations of this unanimous report to the parliament. Finally, I place on my record my sincere appreciation and that of all other members of the joint select committee to our committee secretariat. We received magnificent support from the secretariat and I wanted to take this opportunity today to record in the chamber my appreciation for their work. I commend this report to the Senate.
Question agreed to.