Second Reading Speech
The Hon Wayne Swan MP - Deputy Prime Minister and TreasurerI move that the Bill now be read a second time.
Budgets are a vital part of our democracy, ensuring governments are open and accountable to the community that elects them.
Transparency on costings must apply to both governments and to those who seek to govern, so the community has the proper opportunity to scrutinise policies and their budget impact well before an election. The Gillard Government established the Parliamentary Budget Office (PBO) to promote greater scrutiny on costings to ensure budget transparency from all sides of politics.
Today I introduce the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2013 to amend the governing arrangements for the Parliamentary Budget Office (PBO).
The Bill requires the PBO to publish a post-election report on the election commitments of all political parties, including the full impact of those commitments on the budget bottom line.
This Bill will enhance transparency of the financial impacts of policy proposals, by providing an independent assessment of the tax and spending promises that political parties make.
Through these reforms, the Australian community will have more information about alternative approaches to fiscal policy.
These reforms will allow a more accurate and informed debate on economic policy in this country.
The Bill will impose discipline on the promises of political parties, and incentivise all political parties to be upfront and honest about the cost of their promises.
It's long been accepted that Australian companies must keep their books in good order or face the risk of being exposed by an end-of-year audit.
If we are right to demand this of private companies on behalf of their shareholders and lenders, then we are most certainly right to apply this standard to political parties on behalf of taxpayers.
This reform will help to ensure that all political parties are straight with the Australian people before the election because they know their costings will be revealed by the PBO post the election.
Politicians of all political persuasions have a responsibility to be open and accountable to those who put us in this place.
We are proud to have established the PBO as a vital institution in our fiscal and budgetary framework, and we are prouder still to be expanding its role to add this important new function.
With the support of the Parliament, these reforms will remove the capacity of any political party to try to mislead the Australian people and punish those that attempt do so.
POST-ELECTION REPORT
During an election campaign, political parties can have their commitments officially costed by the PBO, or the Departments of Treasury and Finance and Deregulation.
However, this is not mandatory, and there is currently no legislated mechanism for all the commitments of all the political parties to be compiled and assessed in a consistent manner.
The Australian community therefore relies on the honesty of political parties to submit their policies for costing in good time so that they can be released for the public to see.
This Bill will make it a statutory function of the PBO to publish a report with policy costings of the full suite of a party's election commitments.
It will also require the PBO to indicate the combined total financial impact of those commitments, 30 days after a government forms following a general election.
This means that even if a party does not properly take advantage of the costing options available under the PBO's legislation, or under the Charter of Budget Honesty, the rigour of an independent analysis will still be brought to bear on that party's promises.
This Bill will sharpen the focus on all the commitments made during an election campaign, and ensure these promises are assessed through the independent and non-partisan lens of the PBO.
ELECTION COMMITMENTS
In order for the PBO to produce this report, it will need a clear, defined and agreed list of the election commitments from the political parties.
To achieve this, the Bill will require Parliamentary parties to provide the PBO with a list of the election commitments of these political parties.
As well as allowing the PBO to produce its post-election report, this will ensure that it is abundantly clear what each party has promised.
These lists will be there in black and white for all to see.
INFORMATION GATHERING
Given the PBO's statutory deadline to deliver the report within 30 days, it is important that the PBO has timely access to information from Commonwealth bodies to assist in delivering the report.
Accordingly, the bill includes arrangements for the request and provision of information from Commonwealth bodies.
The proposed arrangements are similar to the arrangements that apply to assist the Treasury and Finance Secretaries prepare the Pre-election Economic and Fiscal Outlook (PEFO).
PEFO actually has to be prepared within just 10 days of the issue of a writ for a general election, whereas the PBO has 30 days to deliver its post-election report.
So, giving the PBO comparable information gathering arrangements to those that apply for PEFO will be more than sufficient.
Further, the PBO is under similar time constraints when preparing policy costings for Parliamentarians during the caretaker period.
Therefore, this new information-gathering process will apply when the PBO is preparing caretaker costings.
There are also existing arrangements in place for the PBO to request and receive information from Commonwealth bodies via a 'Memorandum of Understanding'.
These arrangements will continue to apply more generally, supporting the flow of information to the PBO.
Of course, in compiling the post-election report, the PBO may also require further information from political parties themselves, and from any third parties involved in preparing the parties' costings.
This means that if a political party tries to avoid proper scrutiny by using a private accountant without budget expertise, all of this information can still be obtained by the PBO.
SIZE OF A PARLIAMENTARY PARTY
The Bill provides that the post-election report will include the policies of Parliamentary parties with 5 or more Members or Senators in the Commonwealth Parliament immediately prior to the commencement of the relevant caretaker period.
This approach strikes a balance between the efficient and effective delivery of the report within the statutory timeframe and ensuring that the vast bulk of election commitments across the political spectrum are exposed to rigorous scrutiny.
DUE PROCESS
Of course, for reasons of due process, it is important that political parties have a chance to review the PBO's assessment of their election commitments.
This is needed to ensure that the policies of these parties are fairly and fully considered in the PBO's report.
To achieve this, the bill includes a requirement for the PBO to consult with the political parties regarding their respective election commitments.
TAXPAYER INFORMATION
Finally, this Bill amends the Taxation Administration Act 1953 to allow the Australian Taxation Office (ATO) to provide confidential taxpayer data to the PBO for the purposes of the PBO's carrying out its statutory functions.
This will allow the PBO's work to be more accurate, complete and fully informed.
As with all exceptions to the taxpayer confidentiality provisions, the information provided to the PBO must be kept confidential, and be only used for the strict purposes provided for in the enabling legislation.
The PBO has performed exceptionally well in the short time since its establishment and has taken up an important place in Australia's fiscal policy framework.
I know that many Members and Senators have taken advantage of the PBO's services.
This Bill makes the PBO all the more important, by making it an independent assessor of the fiscal responsibility of political parties at election time.
This will impose necessary discipline on the costly promises often made in the lead up to and during election campaigns, which will be particularly important in this election year.
This will ensure that our public debate is informed by properly costed and properly funded policies, and that our focus is on the policies that will make Australia, stronger, smarter and fairer.