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2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
PARLIAMENTARY BUDGET OFFICE BILL 2011
EXPLANATORY MEMORANDUM
Circulated by authority of
JOE HOCKEY
PARLIAMENTARY BUDGET OFFICE BILL 2011
OUTLINE
The Coalition went to the 2010 Federal election with a policy to establish a Parliamentary
Budget Office ("PBO").
The establishment of a PBO was a key element in each agreement that the Gillard
Government formed with the following individuals and party:
· the Member for Lyne (Mr Oakeshott) and the Member for New England (Mr
Windsor);
· the Member for Denison (Mr Wilkie); and
· the Greens.
The Government committed to establishing a PBO as part of the Agreement for a Better
Parliament: Parliamentary Reform, which was the agreement negotiated between the
Coalition, Labor and the Independents, at the commencement of the forty-third Parliament
of Australia.
This provided that:
"A Parliamentary Budget Office be established, based in the Parliamentary Library,
to provide independent costings, fiscal analysis and research to all members of
parliament, especially non-government members.
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 2011-12 Budget provided funding over four years for the PBO commencing 2011-12.
The Coalition's Bill expedites the process of establishing a PBO.
The Parliamentary Budget Office Bill 2011 seeks to establish a PBO that will be:
· a new body, accountable to the Parliament rather than the Executive, much like the
Auditor-General or Commonwealth Ombudsman;
· independent, to enhance the transparency and accountability of the budget process,
and help deliver better policy and financial outcomes for Australian taxpayers;
· well resourced, to ensure it is effective;
· tasked with providing objective and impartial advice and analysis across the parliament
on the Commonwealth budget and budget cycle, including the impact of major policy
announcements; and
· headed by the Parliamentary Budget Officer, who will be appointed by the presiding
officers of the parliament on the advice of a committee of senior government officials,
with an office of highly trained staff, whose calibre will reflect the Office's status as an
independent body.
FINANCIAL IMPACT
Clause 32(4) of the Bill stipulates that:
"The appropriation of funds for the PBO in a non-election year must not be less than
3.5% of the departmental appropriation for the Department of the Treasury."
Based on the Department of Treasury's Portfolio Budget Statement for 2011-12 (page 26),
this would have the following financial impact:
2011-12 2012-13 2013-14 2014-15
Year
$m $m $m $m
Treasury Departmental
175.08 169.01 161.22 162.49
Appropriation
Appropriation for PBO 6.13 5.92 5.65 5.69
This is broadly consistent with the appropriation for the PBO in the 2011-12 Budget:
2011-12 2012-13 2013-14 2014-15
Year
$m $m $m $m
Budget 2011-12 Appropriation
6.0 6.1 6.2 6.2
for PBO
Source: Budget Paper No. 2, 2011-12, page 283.
NOTES ON CLAUSES
Section 3 provides that the PBO will be an independent statutory authority.
The object of the PBO will be broad, and will include medium and long term budget
projections, a policy costing function, and other matters as requested.
The policy costing function is particularly important and is intended as a replacement for
the current right of the Opposition under the Charter of Budget Honesty to submit costings
- with the permission of the Prime Minister - to Treasury and Finance.
The aim is for the PBO to provide a completely discrete and confidential policy costing
function.
Section 5. The Parliamentary Budget Officer is to be appointed no later than 6 months
from the date of the office becoming vacant. This is to avoid a situation where the PBO is
rendered less effective by the absence of a chief executive.
Section 6 specifies the independence of the Parliamentary Budget Officer.
Section 7 sets out the full range of functions of the PBO.
Section 11 (f) sets out the working methods for the Parliamentary Budget Officer. In
particular, it provides for the Parliamentary Budget Officer to second staff from government
departments and agencies. This is to allow the PBO to obtain specialist staff that are not
otherwise available from outside the public service.
Section 16 sets out the process for selecting the Parliamentary Budget Officer.
Subsection (2) defines the composition of the panel who assess and recommend
candidates for the office of Parliamentary Budget Officer. The Secretary of the Treasury is
not included on this selection panel as there may be a conflict of interest in the Secretary
to the Treasury having a role in appointing a fellow public servant whose function may at
times involve reviewing the work of the Department of the Treasury.
Section 28 provides for the PBO to be located within Parliament House. The rationale is
simply that it is sensible for an agency which exists to service parliamentarians to be
conveniently located. It is consistent with the Government's agreement with the members
for Lyne, New England, and Denison, and with the Greens.
Section 32 (4) provides for the budget of the PBO to be set at an adequate level, as a
percentage of the budget of the Department of the Treasury. This is intended to provide a
minimum level of funding for the PBO to ensure it has adequate resources to fulfil its
functions.
Schedule 1 details the information gathering powers and secrecy and confidentiality
obligations of the PBO. These are broadly aligned with those of the Auditor General, but
do not include search powers, or the power to require information to be provided by other
than public service agencies.