| Parliamentary Joint Committee on Parliamentary Budget Office
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Chapter 1 Introduction
The need for a Parliamentary Budget Office (PBO) for Australia has been
raised at various times since the 1980s, usually with reference to a PBO that
would be similar to the Congressional Budget Office (CBO) of the United States
In 2005, the debate about establishing a PBO was highlighted following
concerns raised in the Parliament about fiscal accountability and transparency
and its connection to the costing of election policy processes included under
the Charter of Budget Honesty.
The need for a PBO was again raised in April 2008, at the 2020 Summit,
where it was identified that there was a ‘need for a well-resourced and
financed parliamentary budget office and research office.’
In its response to the 2020 Summit, the Australian Government put the view that
a PBO was not needed and that a service to advise Members of Parliament was
already available through the Parliamentary Library.
In May 2009, in his Budget reply speech, the then Leader of the
Opposition, the Hon Malcolm Turnbull MP, called for the establishment of a PBO which
was to be modelled on the CBO. The PBO would be responsible to the Parliament,
‘and chartered to provide ... independent, objective analysis of fiscal policy,
including long-term projections of the impact of various measures on the
In June 2010, the Leader of the Opposition, the Hon Tony Abbott
MP, renewed the call for the creation of a PBO. Establishment of a PBO formed
part of the Federal Coalition’s 2010 election policy platform.
On 24 June 2010, a private senator’s bill was introduced into the Senate
proposing to establish a PBO. Similarly to previous
such initiatives, the PBO would be modelled on the CBO. The bill was subsequently
referred for inquiry, to the Senate’s Finance and Public Administration Legislation
Committee. In August 2010, the committee presented an interim report to the
Senate. However, the committee was not able to present a final report, as the inquiry
lapsed on prorogation of the 42nd Parliament.
Following the 2010 federal election, a commitment to establish a PBO
formed part of the minority government agreements signed by the Australian
Labor Party with the Australian Greens and with three independent Members of
There is currently no PBO-type body to support the Australian Parliament.
However, recently, through the passage of
the Parliamentary Budget Officer Act 2010 (NSW) a New South Wales (NSW)
PBO was established.
The NSW Parliamentary Budget Officer is an independent officer of the
Parliament whose primary role is to prepare costings of election policies for
parliamentary leaders and independent members prior to state general elections.
The NSW PBO has also been tasked with responding to requests for research and
analysis from individual Members of Parliament.
Role of the committee
The Joint Select Committee on the Parliamentary Budget Office (the
committee) was established by a resolution passed by the House of
Representatives on 18 November 2010 and by the Senate on
22 November 2010.
The committee was appointed to broadly examine the proposal arising from
the Agreement for a Better Parliament which among a number of proposals
for parliamentary reform also advocated for the establishment of a Parliamentary
Budget Office (PBO).
In relation to improving the resources available to the Parliament
through establishment of a PBO, the Agreement for a Better Parliament
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
[would] be [the] subject of a decision by a special committee of the Parliament
which is truly representative of the Parliament.
The committee’s resolution of appointment provided broad direction on
the type of roles envisaged of the proposed PBO and the subsequent areas for
examination by the committee. The preamble to the committee’s resolution of
It is proposed that the PBO will provide information to
assist the Parliament in its consideration of matters related to the budget, by
undertaking fiscal analysis and other relevant research by providing policy
costings advice. The PBO will also promote greater public awareness of key
budget and fiscal policy issues.
Taking into consideration the Agreement for a Better Parliament
and the committee’s resolution of appointment, the committee undertook its
inquiry with the aim of examining whether a PBO is required and how it could
best serve the needs of the Parliament.
Objectives and scope of the inquiry
The committee received evidence about a range of international PBO models
and the possible application of their various elements in the Australian
context. In respect to a PBO, the committee examined: a possible mandate,
functions, governance structure, level of funding and oversight mechanisms.
In terms of possible institutional characteristics which could form PBO
governance arrangements, the committee examined: the implications associated
with the different types of institutional authority that may be applied to the
office of the Parliamentary Budget Officer, associated access to information
powers, the PBO’s relationship with the Parliament and other agencies, appointment,
dismissal, remuneration arrangements, and term of office for the Parliamentary
Budget Officer, institutional reporting requirements and operational evaluation.
These arrangements were also considered in terms of how they could
enhance transparency and accountability in the scrutiny of fiscal policy.
In forming a PBO framework relevant for Australia, the committee, in
addition to considering various elements of existing PBOs, also considered various
aspects of the Auditor-General’s role as an independent officer of the
Parliament. Through this inquiry, the committee has also taken into
consideration the contribution of the Departments of the Treasury and of Finance
and Deregulation in undertaking policy costings through the Charter of
Conduct of the inquiry
On 26 November 2010, the committee issued a media release announcing the
inquiry and invited submissions to be received by 21 January 2011. The inquiry
was also advertised in The Australian on 1 December 2010 and The
Canberra Times on 4 December 2010.
The committee invited submissions from: Leaders of major and minor
political parties and Independent Members of Parliament, the Treasurer, the Minister
for Finance and Deregulation, the Department of Parliamentary Services, the
Department of the House of Representatives, the Department of the Senate, the
Clerks of the New South Wales Parliaments and a number of international Parliamentary
The committee received 25 submissions and 1 exhibit to the inquiry.
These are listed at Appendix A.
Three public hearings were held in Canberra on 1, 8 and 28 February 2011.
Witnesses who appeared before the committee at these hearings are listed at
Appendix B. Transcripts of evidence received at these hearings are available at:
Chapter 2 outlines the rationale for a PBO in the context of examining
and improving the assistance available to the Australian Parliament in
exercising its role in scrutinising fiscal policy. Chapter 2 also outlines how
a PBO could contribute to and enhance the scrutiny function of the Parliament.
Chapter 3 provides an overview of the possible mandate, functions and
clients of a PBO including its possible role in producing research, analysis
and costings of policy proposals.
Chapter 4 examines the PBO’s: authority-type, access to information powers,
information disclosure and confidentiality considerations, appointment,
dismissal, remuneration and term of office arrangements for a parliamentary
budget officer, oversight and accountability mechanisms, and operational
Chapter 5 provides an overview of the issues associated with staffing, funding
and location of the proposed PBO.