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Public Sector Informant : PSI - September
Tel 02 6126 4500 email@example.com Unit 4, 19 Napier Close, Deakin, ACT 2600 www.gillianbeaumont.com.au We recruit exclusively for the legal profession. [SEPTEMBER 2010] 10 THE PUBLIC SECTOR INFORMANT first Tuesday of the month STAY INFORMED . . . [ACCOUNTABILITY:SILVANA A NTHONY] Ending the blame that mars Economic advice Australia's new parliamentary budget office should be modelled on its US Congress counterpart Closed table: Treasurer Wayne Swan with his departmental head, Dr Ken Henry, and Finance Department chief David Tune. Irrespective of which major party forms government over the coming week(s), Australia will have a parliamentary budget office established over the course of the next term. While the Coalition promised this as part of its election platform, with modest funding of $2 million, Labor has agreed to a budget office as part of a ''deal'' with the Greens. There has been some debate about whether such an office is needed, but there has been no real debate about how to structure and fund such an office so as to effectively service the Federal Parliament and raise the standard of the national economic debate. Nonetheless, the commitment to establish a parliamentary budget of- fice is an overdue reform that will prove more significant and useful than any change proposed so far to parliamentary processes or question time rules (which will continue to be a political tool of the government of the day). The budget office's appearance as an election commitment by both the opposition and the Greens is testa- ment to the wariness with which politicians, media and voters have come to treat the inane finger pointing over the ''costing'' of election policy promises. Over the past decade, the last weeks of Australian election campaigns have typically featured incumbents accusing the opposition of incom- petence and budget black holes while the opposition cries foul over the unfairness of the costing process. Former treasurer Peter Costello's political construct -- the Orwellian- titled Charter of Budget Honesty -- gave the opposition ''access'' to the the Treasury and Finance Department to cost election commitments, but the process was never about third-party access to public servants and always about exploiting incumbency. As a result, there is no alternative ''official'' source of fiscal or macroeconomic advice available to opposition parties or backbenchers. The Parliament -- and everyone else, for that matter -- presently relies on the budget for information about the fiscal framework in Australia, includ- ing historical data on outlays, revenue and budget outcomes and spending estimates. Anyone familiar with the budget papers -- particularly those seeking to track programs or policies over time -- will be acutely aware of their significant limits. These docu- ments also trap the fiscal debate within the confines of a political document, controlled by the treasurer of the day. This is not a criticism of the Treasury or Finance; it is the reality of our political economy. If we seek only to increase the level of scrutiny of the budget and its estimates, including the costing of policy, then a simple solution is to create a research body which examin- es information already in the public sphere and offers its expert opinion on the rigour of the costing, the effect of the cost on the budget and the macro-landscape. This is the road that Britain took when it established the Institute of Fiscal Studies, which relies on openly declared and non-partisan sources of funding to produce its research and analysis of policy across the parties. However, it still relies on the British Treasury's data and sources coming from government agencies. The new coalition Government in Britain, in its recent establishment of the Office for Budget Responsibility, has made further progress to depoliti- cise difficult fiscal decisions. This office is tasked with assessing public finances and the economy, and hav- ing direct control over the budget forecasts and the decisions that underpin the official projections. However, the Office for Budget Responsibility has had a rocky start and its independence has already been questioned, as has its location within the Treasury and the fact that it is staffed by Treasury officers. As a result, a series of changes will be introduced to strengthen the office's independence from both the chancel- lor of the exchequer and the Treasury. MPs on Britain's cross-party Treasury select committee will be able to veto the chancellor's candi- date for the position of chair. The Office of Budget Responsibility will also shift from within the four walls of the Treasury and be staffed with its own employees. If Australia is to truly raise the bar on its economic and fiscal debate, it should heed the lessons from Britain and should seek to emulate the United States' Congressional Budget Office when it establishes the parliamentary budget office. The Congressional Budget Office is a comprehensive model of alternative budget and fiscal advice which assists parliamentary functions and debate, public access to fiscal and policy information, and helps improve the quality of third- party debate, including in the media. As well as analysing and scrutinis- ing the US Treasury's budget outputs and undertaking its own analysis of public policy, the Congressional Budget Office provides a third-party source of costings and budget esti- mates for the Congress. It provides a pre-budget publication based on a 10-year forecast so the Congress has
PSI - October