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representatives vote 2011-09-19#1
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2014-10-07 16:19:23
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<p class="speaker">Joe Hockey</p><p>This will be the path to surplus! My second point, in summary, is that the parliamentary secretary has admitted that now there will be no additional access to information out of the Treasury or the department of finance or any other department without a memorandum of understanding. It will be a memorandum of understanding that this Parliamentary Budget Office is going to have signed with 30 different departments by the next election-yeah, right! They are going to have unfettered access under those MOUs, but that is the subject of another of my amendments.</p><p>The first of my amendments seeks, after all these hours of debate, to prove the case that this government, in partnership with the Independents, is just not serious about having a fully independent parliamentary budget office. By the words of the parliamentary secretary and the admissions in the very drafting of this bill, it is now clear that the government itself, in partnership with the Independents, is de-fanging the Parliamentary Budget Office. In the words of the parliamentary secretary himself: 'It is a lesser parliamentary budget office than that which exists in some other jurisdictions.' Question put:</p><p><i>That the amendment (Mr Hockey's) be agreed to.</i></p><p>The House divided. [18:03]</p><p>(The Speaker-Mr Harry Jenkins)</p><p>Question negatived.</p><p>Debate adjourned.</p> - Joe Hockey
- This will be the path to surplus! My second point, in summary, is that the parliamentary secretary has admitted that now there will be no additional access to information out of the Treasury or the department of finance or any other department without a memorandum of understanding. It will be a memorandum of understanding that this Parliamentary Budget Office is going to have signed with 30 different departments by the next election-yeah, right! They are going to have unfettered access under those MOUs, but that is the subject of another of my amendments.
- The first of my amendments seeks, after all these hours of debate, to prove the case that this government, in partnership with the Independents, is just not serious about having a fully independent parliamentary budget office. By the words of the parliamentary secretary and the admissions in the very drafting of this bill, it is now clear that the government itself, in partnership with the Independents, is de-fanging the Parliamentary Budget Office. In the words of the parliamentary secretary himself: 'It is a lesser parliamentary budget office than that which exists in some other jurisdictions.' Question put:
- _That the amendment (Mr Hockey's) be agreed to._
- The House divided. [18:03]
- (The Speaker-Mr Harry Jenkins)
- Question negatived.
- Debate adjourned.
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representatives vote 2011-09-19#1
Edited by
mackay staff
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2014-01-24 11:41:46
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<p class="speaker">David Bradbury</p><p>I would like to take the opportunity to respond to a number of issues that were raised before the debate was interrupted. I think it is fair to say that the principal claim that was being made by the opposition went to the question of the integrity of forecasting and figures that might be provided by the Treasury. In particular, there was some discussion around the PEFO, the Pre-election Economic and Fiscal Outlook, and I was able to indicate that those figures are independently verified and that they need to be signed off by the secretaries of the departments of Treasury and finance. In the context of that discussion, the member for North Sydney raised some concerns in relation to the other reports that might be required to be produced under the Charter of Budget Honesty Act, in particular in relation to the budget economic and fiscal outlook and the Mid-Year Economic and Fiscal Outlook. The allegation was made that in some respects in the past there had been political interference by previous treasurers with those forecasts and figures. If I recall correctly, the member for North Sydney indicated that he had been there and that he spoke with some personal experience in relation to these matters.</p><p>In addressing those concerns, I make the following points. The first one is that each of the matters contained within the two reports that have been referred to—the budget and MYEFO—the forecasts upon which each of those reports is to be provided, are forecasts that are provided by the Treasury. The assumptions that underpin those reports are produced by the Treasury, but of course those reports are provided by the Treasurer.</p>- <p class="speaker">Joe Hockey</p>
- <p>This will be the path to surplus! My second point, in summary, is that the parliamentary secretary has admitted that now there will be no additional access to information out of the Treasury or the department of finance or any other department without a memorandum of understanding. It will be a memorandum of understanding that this Parliamentary Budget Office is going to have signed with 30 different departments by the next election-yeah, right! They are going to have unfettered access under those MOUs, but that is the subject of another of my amendments.</p>
- <p>The first of my amendments seeks, after all these hours of debate, to prove the case that this government, in partnership with the Independents, is just not serious about having a fully independent parliamentary budget office. By the words of the parliamentary secretary and the admissions in the very drafting of this bill, it is now clear that the government itself, in partnership with the Independents, is de-fanging the Parliamentary Budget Office. In the words of the parliamentary secretary himself: 'It is a lesser parliamentary budget office than that which exists in some other jurisdictions.' Question put:</p>
- <p><i>That the amendment (Mr Hockey's) be agreed to.</i></p>
- <p>The House divided. [18:03]</p>
- <p>(The Speaker-Mr Harry Jenkins)</p>
- <p>Question negatived.</p>
- <p>Debate adjourned.</p>
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<p>In relation to those forecasts, it is worth making the point that these forecasts are the subject of considerable and very robust review, and there are a number of checks and balances that are in place and that have been in place for some time. In particular, the Treasury forecasts are informed by extensive and regular discussions with the Reserve Bank, the Department of Finance and Deregulation and the Department of the Prime Minister and Cabinet and also the ABS, through the Joint Economic Forecasting Group. In addition to JEFG, there is also the opportunity for the Senate estimates process to be used to test the assumptions and parameters outlined within the various reports. In addition, the Reserve Bank and others, in particular private institutions and market economists, will make their own forecasts from time to time and, in the context of the public debate around those forecasts and the scrutiny that will naturally be applied to the government's forecasts, there is a degree of accountability that occurs in that sense as well.</p><p>I think it is also worth making the point that the Parliamentary Budget Office will have direct access to the Treasury and finance departments, notwithstanding what has been said in this debate before. So, regardless of where those forecasts might be generated, there will be full, frank and free access, without any ministerial intervention or encumbrance, that will allow the PBO to contact and to test various forecasts and to raise concerns that they may have. That is something that is permitted within the regime that the government is supporting in the bill.</p><p>I think it is also worth making the point, in the interests of clarity, that the legislation does not in any way prevent the PBO from assessing, evaluating or analysing the economic forecasts. The PBO is free to do that, but what they are not free to do is to dedicate resources that would be allocated to them to the task of forecasting. There is a very good reason for that, and that is why the joint committee—which, I remind the House, handed down recommendations that were unanimous, including members from the opposition—made the point that this would be a very expensive exercise and one that would not be a very useful allocation of resources. The opposition referred to the Congressional Budget Office on a number of occasions. In doing so they should make the point that the annual budget of the Congressional Budget Office is $US50 million, considerably more than what is envisaged for the PBO, because it has different functions. <i>(Time expired)</i></p> <p class="speaker">Joe Hockey</p><p>The parliamentary secretary has just confirmed everything that I said. He absolutely confirmed that in fact the PBO will be only able to use the fiscal and economic forecasts of the Treasury, unless it is in relation to the pre-election fiscal outlook, which is the only document under the Charter of Budget Honesty that is in fact signed off as the figures that actually belong to the Department of the Treasury and department of finance. Otherwise, the PBO is constrained to looking only at the government's figures; that is all. Then they had the audacity to claim that this was a recommendation in the report. I do not recall seeing it; in fact, I went back to the report.</p><p>There is no recommendation in the committee's report. The mandates of the PBO can only use information and reports published under the charter. There is one mention, which at 3.100 says:</p><p class="italic">…the PBO should not be required to produce its own fiscal forecasts. Rather, it should provide analysis of the Government ' s fiscal forecasts…</p><p>Okay; fine. But that is actually not a recommendation, nor is it the case that it says it would not be able to produce its own fiscal forecasts. So, for example, let's take this, an issue that is highly contentious: what is the structural deficit? The Treasury does not do its own modelling on a structural deficit. It had a part of the budget papers that was allocated to a discussion of the structural deficit. This is an issue that is hugely contentious in relation to the fiscal outlook, and under the government's amendment the PBO would not be able to do any assessment of the structural deficit. How bizarre. It is not an independent body.</p><p>Secondly, it would not be able to use data provided by the Reserve Bank, nor would it be able to use data provided by ABARES. Under this situation, the government is saying, 'Look, there is only one set of data that can go into the PBO—that is, the government's data, the executive's data. All other information cannot go to the PBO because it cannot be challenged.' Frankly, if this is what the parliament thinks is an independent body, it is seriously kidding itself.</p> <p class="speaker">Bronwyn Bishop</p><p>When we began debating this last week, I made the point that what the government is proposing for this Parliamentary Budget Office is something that is simply linked to the coattails of Treasury. That is totally and utterly unacceptable to the opposition for very good reasons, because the Treasury has become so politicised. I made the point that Treasury and the head of Treasury had been rewarded for things that they had done to assist the government.</p><p>I want to go specifically to some of what happened after the election when the Independents said that they wanted to have our costings analysed because we had said we did not want to politicise Treasury to look at them. We had them done independently, and then the Independents said that they would make up their decision about how good or bad we were on what Treasury had to say about those costings.</p><p>I want to go to some of them directly to say why we cannot have a Parliamentary Budget Office which is attached to a politicised Treasury. Let's look at the conservative bias allowance. First of all we said we would have a saving of $2.5 billion. Mr Henry said, 'No, you can't have that, actually. You can't be counted as having $2.5 billion,' because, in his words, 'it will not realise any actual budgetary savings if you cut back on the conservative bias allowance that is factored in to allow a little bit of a buffer in the way projections are made.' Yet at the same time in the 2009-10 budget, Mr Henry, himself responsible for that budget, in Budget Paper No. 1 had set out that the government was saving $4.6 billion 'by savings from the conservative bias allowance over the forward estimates'. He said, 'This results in a reduction of expenses of $1.5 billion in 2010-11, $1.5 billion in 2011-12 and $1.6 billion in 2012-13, totalling $4.6 billion.' Yet Mr Henry said to the Independents, who were making a judgment: 'They can't count $2.5 billion. That's part of the $11 billion so-called black hole.'</p><p>Then we go to cutting expenditure for the Health and Hospitals Fund—another interesting one. Here we said we were going to save $3.3 billion, and Mr Henry said to the Independents, 'They can't do that. They would have to identify before the election just what programs were going to be cut out of the three funds.' They were: the Health and Hospitals Fund, the Education and Investment Fund and the Building Australia Fund. Then we said, 'But we asked you for that list of programs, Mr Henry, and you said you couldn't find one. It didn't exist.' Finally, in the middle of these protracted discussions for the benefit of the Independents to decide who they might back for government, he said, 'I've got a secret list. I've got it here, but guess what? I can't let you see it.' Isn't that amazing? 'I can't let you see it.' Did he ever give a reason for why this was a secret list, why it couldn't be made public or why it hadn't been able to be found before? Of course not. Of course Mr Henry should be rewarded. He did a wonderful job for the government.</p><p>Then we come to the NBN. Savings here were going to be $2.4 billion, and we were going to save that by not borrowing money on which we said the interest rate payable was 5.5 per cent. Mr Henry came to the rescue of the government again and said, 'You can't save that amount of money, because we say the interest rate will be 4.9 per cent.' He would not be moved. He said, 'I've made a decision, so that will be another $900 million to add to your black hole.'</p><p>I took the figures today for the average interest rate paid from July 2010 to today. Guess what it is? It is 5.23 per cent. So Mr Henry should be rewarded—4.9 per cent helped the government find an error in our costings of another $900 million.</p><p>Then we go on to employment participation where we said we will make savings in welfare payments of $600 million. 'Oh no,' Mr Henry said, 'you can't count that because that's a second-round figure.' But, heavens to Betsy, in the same budget this year we see that a second-round saving of $600 million on the so-called mining tax was allowed by Dr Henry. Dr Henry assisted the government to find another $600 million so-called error in our accounts. So Dr Henry should be rewarded with a $528,000 a year job in the Prime Minister's office. That is why it is politicised and that is why we cannot trust them. <i>(Time expired)</i></p> <p class="speaker">Andrew Robb</p><p>My two colleagues have shown how the current process is devoid of integrity and credibility and has been grossly politicised. I experienced that firsthand after the last election. The parliamentary secretary opposite is yet to provide one decent argument on amendment (1). We will start with amendment (1); that is what we are debating at the moment, right? He has not provided one argument why the PBO and all the rest of us should be hogtied to the numbers, figures, forecasts and analysis of Treasury. Why should that be the case?</p><p>I will give you an example. Over the last four years we have been debating perhaps the biggest structural adjustment that will ever be considered by any of these parliamentary members: the imposition of a carbon tax and, subsequently, an emissions trading scheme. There has been endless modelling for four years of the impact of this, but not once has the model that has generated all of these numbers, all of these outcomes, all of this rhetoric and all of these forecasts by the government been revealed. They are all part of a black box in Treasury. We have asked endlessly to see the modelling; never have we seen one line of code from that modelling—not one assumption. We have deduced that one assumption built into the model is that there would be no unemployment by 2050. Surprise, surprise! When they got the outcome of the modelling there was no unemployment by 2050. If you put in that assumption, it is not a surprise.</p><p>What if you changed that one assumption and made it a floating variable in that model? What would be the outcome? What is the sensitivity to fixing that particular variable? We will never know. What would the Parliamentary Budget Office do if they were given that model? They would do some of that sensitivity analysis. We would be better informed; the public would be better informed; the nation would be better informed—especially when we are going it alone on this carbon tax. We are ahead of the world. No-one else is doing it. Yet we have been tied to this situation with Treasury. This is why we need credibility and integrity restored to the process. Treasury has been politicised in this whole exercise. We need the capacity for an independent body to analyse such critical matters as the modelling—the detailed, exhaustive, massive modelling—that has been undertaken.</p><p>We will get results this week again, but I can assure you they will just be outcomes. Out of this black box again will come a whole series of outcomes around which you will make the most ambitious statements. You will hold everyone hostage to this black box. Having come to government and said that transparency was at the heart of the way in which you would run government, since then we have had nothing but obfuscation, no benefit-cost analyses and a refusal to provide any of the analysis that sits behind all of this. No wonder we need to go to the next election and debate policy based on independently assessed analysis—not only our policies but the policies of the government. The policies of the government need to be scrutinised and analysed. They have not been, and that is why this process is heavily politicised. It is why you need integrity and credibility to be restored to this process.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>
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