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2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CHARTER OF BUDGET HONESTY AMENDMENT BILL 2011
EXPLANATORY MEMORANDUM
Circulated by authority of
JOE HOCKEY
CHARTER OF BUDGET HONESTY AMENDMENT BILL 2011
OUTLINE
The Charter of Budget Honesty Act (1998) was intended to produce better fiscal outcomes
through institutional arrangements to improve the formulation and reporting of fiscal policy.
A key element of the Charter were arrangements for more equal access to Treasury and
Finance costings of election commitments by the Government and Opposition.
One shortcoming of these arrangements for the Opposition is that they require the
agreement of the Prime Minister for Opposition costings to be submitted to the
Departments of the Treasury and Finance.
They also require the public release of the costing of a policy which has been submitted.
These arrangements create an environment where costings are not confidential and
cannot be challenged or reviewed prior to being made public.
The Coalition has introduced the Parliamentary Budget Office Bill 2011 which seeks to
establish an independent statutory authority which will provide objective and impartial
advice and analysis on:
· The Commonwealth Budget and budget cycle;
· Medium and long-term budget projections;
· The costs of policy proposals; and
· Other matters as requested by Members and Senators.
The policy costing function of the PBO will differ from that in the Charter of Budget
Honesty. Requests by non government MPs or Senators for policies to be costed will not
require the agreement of the Prime Minister. Further, the costings will be confidential as
they will not be able to be released to the public without the express approval of the
relevant MP or Senator.
The costings provision in the PBO will supersede and make redundant the comparable
provision in the Charter of Budget Honesty.
The Charter of Budget Honesty Amendment Bill 2011 removes the redundant provisions
from the Charter of Budget Honesty.
FINANCIAL IMPACT
This Bill will have no financial impact.
NOTES ON CLAUSES
Clause 1 removes the definition of the Leader of the Opposition. This definition will
become redundant once the provisions relating to costings for the opposition are removed
from the Charter of Budget Honesty Act 1998.
Clause 2 removes the provision for the Leader of the Opposition to request the
Departments of Treasury and Finance to cost opposition policies. This service becomes
redundant under the Parliamentary Budget Office Bill 2011.
Clause 3 removes subclause 29(4) from the Charter of Budget Honesty which provides for
the Leader of the Opposition to request the Prime Minister to refer policies for costing. It
also removes subclause 29(3) from the Charter of Budget Honesty which essentially
replicates the new subclause 29(1) and is redundant.
Clause 4 removes the reference to the Leader of the Opposition from the provision which
provides for costing requests which have been made to be withdrawn.
Clause 5 removes a redundant reference to the Leader of the Opposition.
Clause 6 corrects a reference to the withdrawal of a costing request in subclause 31(1)
Note 2.