| Parliamentary Joint Committee on Parliamentary Budget Office
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Chapter 4 Authority and accountability
The type of authority vested in the Parliamentary Budget Officer and
through them, their Parliamentary Budget Office (PBO) would have implications
for: reporting channels, their access to information powers, and subsequent
information publishing requirements, and the level of funding required for the
PBO to fulfil its mandate.
A range of accountability and oversight mechanisms were suggested for a
PBO. In the case where the head of the PBO would be an independent officer of
the Parliament and so able to determine their own work program, oversight could
be enabled through either the establishment of a parliamentary committee
dedicated to that purpose or an existing joint parliamentary committee.
This chapter examines the options put to the committee that would
establish the authority of the Parliamentary Budget Officer and their Office
through varying degrees of independence.
As outlined in Chapter 1, the Agreement for a Better Parliament
provides that the PBO be based ’in the Library, to provide independent
costings, fiscal analysis and research to all members of Parliament, especially
non government members.’
The majority of evidence presented to the committee suggested that the
office of the Parliamentary Budget Officer should be made independent. An
independent PBO would ensure objective analysis and advice to the Parliament.
A number of different types of PBOs were suggested with varying degrees
of independence. They were:
- Create a ‘stand-alone
Parliamentary Service agency (with its own legislation), similar to the
Congressional Budget Office (CBO) of the United States of America (US).’
- Through amendment to
the relevant Acts, establish the PBO as an adjunct to an existing body such as
the Australian National Audit Office (ANAO) or the Productivity Commission.
- Establish a
permanent, independent Commission of Budget Integrity, to take the form of a ‘Commonwealth
owned company outside of government.’
- Establish the PBO within
a Government department, similar to the Central Planning Bureau (CPB) of The
- Create a separate
authority which is not part of the Parliament or a Government department.
- ‘Establish the PBO
within the Department of Parliamentary Services (DPS), possibly within the
Library or as a parallel agency within the DPS. Under this option, the
enabling legislation would amend the Parliamentary Services Act 1999 (Cwlth).’
- The PBO be
established within the Parliamentary Library structure:
- and the functions of the PBO are legislated for, but assigned to
the Parliamentary Librarian (as the independent statutory office holder),
through amendments to the relevant legislation. The head of the PBO would not
be a statutory office holder.
- headed by a Parliamentary Budget Officer:
- ‘who would be designated as an independent statutory office
holder under the [relevant legislation], but he/she would still report to and
be accountable to the Parliamentary Librarian as the head of the Parliamentary
- who would be designated as an independent statutory office holder
under the [relevant legislation], and the Parliamentary Budget Officer and the
Parliamentary Librarian have joint responsibility/accountability for the
functions of the Parliamentary Library.’
While each option has its advantages and disadvantages, the underlying
principle in each is associated with the type of authority of the PBO, that is,
whether it is created as a ‘stand alone’, independent body, or whether it is
placed within an existing institutional structure.
The Parliamentary Librarian favoured locating the PBO within the
Parliament, either as a separate agency or within the Parliamentary Library.
The Parliamentary Librarian stated that such an arrangement was similar
to that applied in Canada where the PBO reports to the Parliamentary Librarian
and where the PBO is a unit within the parliamentary administration.
However, the Parliamentary Librarian placed a caveat on transposing the
Canadian model into the Australian context in relation to the need to clarify
PBO reporting and funding arrangements. The Parliamentary Librarian stated:
One area where a potential “misfit” could occur in
transposing the Canadian PBO model into the Australian context concerns
resource allocation. Under the Canadian funding arrangements the PBO and the
Library of Parliament as a whole are fully independent from the Government in
their operation and funding. Further, although the PBO is located within the
Library of Parliament, its budget is separate from that of the library. In
creating a PBO within the Australian context these funding issues will need to
be considered in depth.
The Departments of the Treasury and of Finance and Deregulation (Treasury
and Finance) stated that legislating for the functions of the PBO, but not
making the head of the PBO a statutory office holder could ensure clarity and
accountability in the PBO reporting structure.
In addition, Treasury and Finance stated that this structure could in
the longer term create economic efficiencies through the sharing of existing
administrative arrangements. In regard to this option, Treasury and Finance
[This] ... option offers the greatest opportunity for
effectively making use of the existing structures and processes of the
Parliamentary Library. This is likely to reduce the need for significant
additional resources for the PBO that relate primarily to pure administrative
[It] ... also provides the greatest clarity with regards to accountability
and reporting structures. Establishing a Parliamentary Budget Officer alongside
the Parliamentary Librarian could create tension and uncertainty around the
respective responsibilities and/or accountabilities of the two officers. This
appears to have been problematic in the Canadian context. Assigning the
functions of the PBO to the Parliamentary Librarian could help avoid these
Mr Stephen Bartos put the view that placing the PBO within Executive
agencies such as the Treasury or the Department of Finance and Deregulation,
could create a situation of divided loyalties for support staff and stated:
It is possible to create stand alone public service bodies
with a strong independent role (for example, the Productivity Commission or
ANAO) provided this is their dedicated role; it would not be possible to ask
Treasury or the Department of Finance and Deregulation to on the one hand
advise their Ministers while at the same time providing independent advice on
similar subject matter that could enter the public domain.
The Auditor-General was not in favour of establishing the PBO as an
adjunct to the ANAO as the role of the Auditor-General is directed at examining
historical information and performance in contrast to potential policy
measures, costing projections and assumptions. The Auditor-General stated:
... the focus of our work is on past performance (financial
and administrative), rather than on potential policy measures, costing
projections and assumptions. Further, the body of auditing and assurance
standards by which the ANAO undertakes its responsibilities is largely directed
at historical information and performance. It is for these reasons that the
ANAO has not been in favour of any suggestion that it audit the Government’s
budget or elements of the budget.
Mr Alan Thompson, Secretary of DPS initially preferred establishing the
PBO within DPS with the rationale that the PBO would have a lower total
establishment cost than if the PBO were an independent body or adjunct to the
ANAO or Productivity Commission.
Mr Alan Thompson, later revised this stance to prefer an independent PBO
where that PBO were to be tasked with producing major publications in line with
those produced by the CPB. Mr Alan Thompson stated:
I believe the Department of Parliamentary Services can be
very supportive and we would certainly be willing to host the body, but I am
very conscious of the need for this body to be seen to be clearly independent.
DPS outlined its reasons for supporting a ‘stand alone’ PBO and stated:
Firstly, the new PBO would need clear lines of Parliamentary
accountability; at the margin this accountability could be less clear if the
PBO is nested within another body.
Secondly, it is likely to be easier to attract and retain an
appropriate leader and senior staff.
Thirdly, budget setting should be clear for the Parliament
and the new body.
The Auditor-General commented that the independence of his position
allows him to have corporate budgetary control and set audit priorities, which
would be hindered if a PBO were placed within the DPS departmental structure.
In its assessment of PBOs’ best practice, the Organisation for Economic
Co-operation and Development (OECD) favoured an independent and non-partisan
PBO as such an arrangement is seen to be the ‘pre-requisite for [a] successful
parliamentary budget office.’ In addition, ‘a truly non-partisan unit does not
present its analysis from a political perspective and serves all parties in the
The Parliamentary Budget Officer of Canada supported the OECD stance on
the importance of creating an independent PBO in respect to creating a ‘real’ PBO
for Australia. The Canadian Parliamentary Budget Officer stated:
I have seen the submission provided by the OECD, from
Mr Blöndal, who has a senior position there. For a parliamentary budget
office, he outlined what some of the key principles should be with respect to
independence and how it releases documents, and budget and scope. I think those
are good principles to start from for Australia if you are interested in
creating a real parliamentary budget office.
The Canadian Parliamentary Budget Officer also commented that an
independent PBO with a direct reporting relationship with Parliament would free
it from bureaucratic interference. The Canadian Parliamentary Budget Officer
I also think positioning the office of the parliamentary
budget officer with a direct reporting relationship to parliamentarians would
be helpful in terms of freeing it from bureaucratic interference. I know some
of the significant costing reports or some of the economic and fiscal
projections that we provided were quite different [from] the government. It
created a lot of bureaucratic angst amongst bureaucrats in parliament in Canada. If you really wanted to be free of that type of interference then creating an independent office would help as well.
The Federal Coalition shared a similar view and suggested the PBO should
be an ‘independent and well resourced statutory authority.’
The Federal Coalition stated that an independent PBO would ‘enhance the
transparency and accountability of the budget process and help deliver better
policy and financial outcomes for Australian taxpayers.’
As mentioned earlier in this report, the Business Council of Australia
(BCA) made the point that there is no independent fiscal policy equivalent to
the Reserve Bank of Australia, the Productivity Commission or the ANAO. The BCA
added that these institutions contribute to Australia’s economic performance
through enhanced scrutiny, oversight and advice.
The BCA further stated that while advice from agencies such as
Treasury and Finance is ... ‘generally robust and well-regarded, the advice
provided on fiscal policy by these agencies is for the most part confidential
and it is not possible to determine the extent to which the government of the
day has or has not followed that advice.’
Mr Stephen Bartos also commented that there is a role for an independent
body in providing assurance to improve public and market confidence in fiscal
governance. Mr Stephen Bartos stated:
.. many stakeholders do see a valuable role for an
independent body in validation of the forecasts and commentary on official
fiscal documents. This would provide a level of independent assurance that
would improve both public and market confidence in fiscal governance in
The Auditor-General placed value on enabling the PBO to function in an
independent manner ‘free from government or political interference’ which in
turn would ensure its effective operation.
The Public Policy Institute of the Australian Catholic University (PPI),
suggested the PBO should be autonomous with a similar relationship to the
Parliament as the Auditor-General. The PPI stated:
... a PBO in the Australian Parliament, to be effective and
durable, needs to be autonomous. ... it is the relationship between the
Parliament and the Auditor-General which provides a useful guide as to how the
PBO might relate to the Parliament.
The Australian Chamber of Commerce and Industry (ACCI) emphasised the
importance of ensuring that the Parliamentary Budget Officer is independent of
the Government and suggested guaranteeing security of funding. The ACCI stated:
The independence of the PBO is a paramount reason for its
existence. Accordingly, security of funding for the body must be guaranteed for
an extended period and a mechanism should be adopted to ensure its staff,
including its head, are independent of the government.
The Auditor-General suggested that the provisions contained in the Auditor-General
Act 1997 (Cwlth) are a useful starting point for considering the type of
arrangements that could be used to establish a PBO through legislation.
The independence of the PBO could be achieved by legislating for:
- the method of
appointment and termination of the Parliamentary Budget Officer and the status
of the PBO
- method for
remuneration of the Parliamentary Budget Officer
- ‘the extent of the
PBO’s discretion in determining its own work program and priorities’
- ‘arrangements for
determining the PBO’s budget’
- PBO’s reporting
The Clerk of the Senate stated that it would not be appropriate for the
PBO to be located in either chamber department as the work of the PBO is
different to that of the chamber departments with limited crossover potential.
In addition, managing a PBO requires specialist financial analysis skills and
experience, which could be applied to the selection criteria of future clerks,
but which would also narrow the field of applicants.
The Clerk of the Senate further commented that the most highly regarded
option for a PBO is one that is enshrined in legislation, which creates an
independent office, similar to the Auditor-General. However, with such a
legislated model, the PBO would not be able to be directed by the Parliament or
the Executive and so the public information it provides could be constrained by
its establishing legislation. The Clerk of the Senate stated:
... if you want a Rolls-Royce [Parliamentary Budget Office],
go for a legislated one. But part of the Auditor-General’s independence is
established by the fact that he cannot be directed by either House or by
committees or by the Executive, so that means that there is information that
the Auditor-General will not produce to Parliament if he feels that it is not
within his statutory brief to do so. So, with the legislated model, you are
buying something that is known but is also constrained. You might not be able
to have free-for-all information for use however you want.
Access to information
For a PBO to fulfil its mandate effectively it will require access to Executive
agency information. Access to this information could be provided through a
number of mechanisms, depending on how the information is intended to be used
and whether it would be published. The power to contract external expertise is
also important in providing the PBO with additional analytical assistance.
The Parliamentary Librarian highlighted the importance of the PBO having
access to Executive agency data, at no cost, as without this data, the PBO
‘would be limited to using publicly-available information, and what agencies
are willing to provide.’ If this data was priced,
it would have implications for the budget of the PBO.
A range of options for access to information powers were presented to
the committee. These included:
- Legislating for full
access to Executive held information. The Auditor-General
Act 1997 (Cwlth) provides an example of full access provisions, enabling
the Auditor-General to direct the production of information and creates a
criminal offence for failure to comply.
- Legislating for
partial access to Executive held information based on principles consistent
with existing freedom of information or public access provisions.
- Accessing information
through the provision of information protocols such as a Memorandum of
Understanding (MOU) between the PBO and relevant Executive agencies.
- Use of the Freedom
of Information Act 1982 (Cwlth) to request Executive held information on the
same basis as the public.
The OECD supported legislating for the PBO to have full access to
information and economic models held by Executive agencies, in a timely manner.
The OECD stated:
There will always be a large asymmetry of information between
the government and such bodies – no matter how well they are resourced. This
creates a special duty to give such bodies full access in legislation to all
relevant information in a timely manner. This includes all the models used by
the government for the assumptions underlying the budget – economic, revenue
The Auditor-General also commented that an effective PBO ‘would require
full and free access to all information and records necessary to perform its
functions’, possibly including cabinet documents. In addition, the information
would need to be provided in a timely manner. The Auditor-General also
suggested that the PBO’s access to information powers should be legislated for
It is considered that the PBO’s enabling legislation would
need to provide legislative authority for the PBO to access relevant
information and records held by agencies and other bodies in a timely manner.
Depending on the breadth of the proposed role, access to Cabinet documents may
The Canadian PBO favoured free and timely access to information for the
PBO and cautioned against excluding access to cabinet documents, as
classification of documents as cabinet-in-confidence may increase over time to
prevent scrutiny by Parliament. The Canadian PBO stated:
Our own view is that, unfortunately, in Canada perhaps this
line has shifted somewhat and we tend to use cabinet confidence perhaps too
frequently as a way to not provide information to parliamentarians to carry out
their fiduciary responsibilities.
The Department of the House of Representatives stated that the PBO
should not be given wide ranging access to information powers, as this approach
may not be appropriate for an agency with a broad remit such as the PBO. Rather
a request system for information would better suit a PBO and be necessary to
develop a solid and practical operational framework.
Mr Stephen Bartos cautioned against the provision of strong access to
information powers for the PBO, as they could hinder the flow of information to
the PBO. Mr Stephen Bartos stated:
I would caution against that, because that has the danger of
setting up an adversarial relationship between the office and the departments
concerned. It might be that you set up a power that is a last resort sort of
measure, that says that in the event it is unable to obtain access, it should
be able to report to a parliamentary committee on the reasons why it has been
unable to obtain access. Then that parliamentary committee might call the
relevant recalcitrant department before it and say, ‘Why haven’t you given our
PBO access to the information they need?
Treasury and Finance also cautioned against legislating for PBO powers
‘that would compel agencies to provide requested information’, as this ‘could
create conflict with the Public Service Act... which requires agency heads to
manage their departments for the benefit of the Prime Minister.’
Treasury and Finance favoured arranging the PBO’s access to information
powers through information protocols through a negotiated MOU as this would
provide flexibility for Executive agencies to balance their responsibilities
under the Public Service Act.
Treasury and Finance suggested that information protocols would need to
include provisions consistent with the Freedom of Information Act 1982 (FOI)
(Cwlth), ‘to allow agencies to refuse requests on the same grounds that
documents can be exempted under the FOI Act and for the review of those
Further, Treasury and Finance proposed that the following types of
information should be included as exempt items under the FOI Act in terms of
provision of these items to the PBO. There were:
- Some information
which is commercially valuable in nature
produced for the purpose of deliberative processes or the national economy’
- Certain cabinet documents
- Minister’s briefing
documents (related to cabinet submissions)
- Information which is
subject to privacy and taxpayer secrecy provisions
- ‘Private sector
information which is provided to agencies on a confidential basis with legal
sanctions that could apply‘.
Treasury and Finance stated that the information needs of the PBO are
likely to evolve and that an MOU would provide flexibility for the PBO and
departments in managing changing information requirements, encouraging ‘a
transfer of understanding as well as information’.
The NSW Parliamentary Budget Officer Act 2010 (NSW) provides for
the PBO to request information from Government agencies, for agencies to
respond within ten days, and for agencies to decline requests consistent with
the Government Information (Public Access) Act 2009 (NSW).
The Clerk of the Senate considered the access to Government information
provisions of New South Wales (NSW) inadequate and stated:
... it seems to me that the Parliamentary Budget Officer in
New South Wales can get access to the sort of information from government
agencies that anybody would be able to get under FOI in New South Wales. Is
that good enough for a Parliamentary Budget Office? I do not think so, because
the parliament as the grand inquisition of the nation is scrutinising the
operations of government on behalf of the people, to use very broad terms, and
has both the right and the powers to have information to inform it to do that
job properly. So the question of how information is to be acquired is one of
the crucial ones that your committee needs to look at. It is almost as crucial
as the functions of the office in the first place.
Provisions to engage relevant experts as required were also considered
important for the PBO. The Canadian Parliamentary Budget Officer noted that the
ability to contract in and consult with experts can enable an additional source
of analysis for parliamentarians. The Canadian Parliamentary Budget Officer
In previous studies around, say, the costing of our mission
in Afghanistan, we went to a combination of people who have testified in the US
on the costing of the Iraq war and to academics who have provided costings of
other wars, both in Canada and the United States.
The use of external expertise can also assist with the process of
developing an appreciation of and familiarity with data provided to the PBO
from Government agencies.
In addition, the Auditor-General observed that the PBO’s access to
information powers ‘would need to be complemented by strict confidentiality
Confidentiality and disclosure of information and reports
The ability of the PBO to access information is associated with its
arrangements to secure that information and use it appropriately, taking into account
any reasonable need to withhold the information, or aspects of it, from the
public domain. As the Auditor-General observed, the PBO’s access to information
powers ‘would need to be complemented by strict confidentiality requirements.’
The issue of the confidentiality of the information obtained by the PBO
extends beyond that sourced from Government departments. The PPI expressed
concern about information the PBO may source from private sector organisations,
businesses and trade unions and recommended that:
... by whatever means the PBO is established, express
provision should be made for gathering and protection of information.
The Auditor-General suggested that a public interest test similar to
that contained in the Auditor-General Act, could be applied.
Section 37 of the Auditor-General Act enables the Auditor-General to withhold
the publication of sensitive information if the Auditor-General or the
Attorney-General considers that its release would be contrary to the public
In relation to information sourced from Government departments, issues
concerning the use of information could be avoided where departments elect ‘to
make the information provided to the PBO publicly available, similar to the
practice of publishing information released under the FOI Act.’ This may be
relevant if ‘confidential PBO advice is later revealed to be in conflict with
advice provided by [a] Government [agency].’
There may also be instances where the very nature of a request made of
the PBO by a parliamentarian is sensitive. The NSW Parliamentary Budget Officer
Act contains particular provisions to maintain the confidentiality of the
information held with the PBO in relation the requests made of it by its
clients and the preparation of responses to those requests. Penalties apply for
the unauthorised release of client related material.
The Clerk of the NSW Legislative Assembly was of the view that a code of
conduct which sets out confidentiality requirements may be needed for PBO staff.
Further, to ensure the security of confidential documents, protocols could also
be put in place.
The extent to which the work of the PBO is published is another
important consideration. Some contributors to the
inquiry argued for the publication of all of the products of the PBO to enhance
transparency and the public value of its work. Whereas others
considered that the provision of confidential material by the PBO would be of
value to its clients.
There is a tension between providing confidential work to
parliamentarians and publishing that work. According to Mr Stephen Bartos:
There is also a tension between provision of confidential
advice to parliamentarians (which then may be used in political debate) and the
desirability of putting work on fiscal issues into the public domain. In the
event of a conflict, the best interests of Australia would be better served by
giving primacy to the interest of transparency.
The Auditor-General advised that ‘public reporting would enhance the
overall transparency and accountability of the PBO’.
The Canadian Parliamentary Budget Officer suggested that PBO legislation
enshrine ‘the principle of transparency in the conduct and release of
analysis.’ Enshrining this
principle (in addition to other principles such as independence of office) in
legislation would ensure a strong and clear foundation for a PBO.
The OECD recommended that the information provided by a PBO ‘should be
made available concurrently to all political parties and the public.’ The PBO
should ensure that it does not pre-empt Government reports and can do this by
establishing report and analysis reporting dates.
The Parliamentary Library has a statutory requirement to provide
confidential information, analysis and advice to its clients. The Parliamentary
Librarian stated that a similar requirement for the confidentiality of client
work would be appropriate to meet the needs of parliamentarians.
The Joint Standing Committee on the Parliamentary Library considered
that the confidential nature of the work of the Library, as well as
impartiality and timeliness, crucial to its success, and relevant to any
parliamentary service, including the PBO. The Joint Standing Committee on the
Parliamentary Library stated:
Core values of impartiality, timeliness and confidentiality
are vital for the success of any parliamentary service. The Parliamentary
Service Act mandates these values for the Parliamentary Librarian and these
core values will be useful to the operations of a Parliamentary Budget Office.
Without these core values the new service would struggle to find direction and
may not meet the needs of senators and members.
The PPI commented that there are a number of protocols in place in the
Parliamentary Library and research service, which could be applied to the PBO. The
There are already a number of protocols and practices within
the Australian Parliament, including within the provenance of the Library and
Research Service. Only occasionally do these protocols and practices give rise
to controversies. They therefore furnish a known foundation for the new
[organisation] to build upon.
Treasury and Finance stated that the protocol under which the
Parliamentary Library publishes routine output allows ‘the public to benefit
from the routine research of the Library, but enables parliamentarians to seek
confidential advice.’ Under this protocol the Parliamentary Library publishes
‘routine output [and] provides responses to non routine requests from
parliamentarians on a confidential basis unless otherwise agreed.’
Related to the use of information within the PBO is the issue of how the
confidential or public reports of the PBO are used by its clients. The NSW PBO
legislation contains provisions to enable the Parliamentary Budget Officer to
make a public statement where it is of the opinion that the material provided
has been misrepresented in the public domain.
Where a public misinterpretation has been made about the work of the
PBO, there may be a further need to contact the client, before issuing a public
statement. This would ensure that the PBO and the client ‘do not end up in a
war of words ... through the media about any misrepresentation.’
Appointment, dismissal and remuneration arrangements
There are a range of appointment and dismissal arrangements that could
be applied to the Australian PBO. A broad outline of international and domestic
The OECD suggested that the Parliamentary Budget Officer should be
appointed by the legislature and have full discretion in hiring staff.
The DPS made the link between accountability of the PBO and appointment
and dismissal of the head of the PBO and suggested the appointment of the
Parliamentary Budget Officer could be made on recommendation from an
independent officer with similar dismissal provisions. DPS stated:
The first component of this accountability is that the leader
of the PBO should be appointed by the Presiding Officers based on
recommendations from an independent officer (such as the Parliamentary Service
Commissioner). These arrangements are similar to the appointment provisions for
my position or the Parliamentary Librarian. Dismissal provisions could also be
Treasury and Finance commented that there is a need to avoid
‘perceptions of a politicisation of the appointment process.’ Treasury and
Finance suggested the appointment of the head of the PBO could be determined by
the Presiding Officers for a term of three years on recommendation by the
Secretaries of Treasury and Finance.
Further, Treasury and Finance outlined grounds for termination for the
head of the PBO and stated:
To enshrine the security of the position, the grounds for
termination (for example, misbehaviour or physical or mental incapacity) could
also be subject to a decision by the Presiding Officers as is the case for the
Examples from other jurisdictions
Canadian Parliamentary Budget Officer
The Canadian Parliamentary Budget Officer is a Governor-in-Council appointment
(Governor-General acting on the advice of the Prime Minister and Cabinet) and
holds office during pleasure for a renewable term of
not more than five years. The appointment of the
Canadian Parliamentary Budget Officer was intended to be an independent
officer, but was not legislated as one. In terms of ensuring independence
through appointment and dismissal arrangements the Canadian Parliamentary
Budget Officer stated:
A true independent budget authority should be appointed by
Parliament and dismissed for cause. It is problematic for a budget officer to
provide analysis that may be used by members of Parliament to hold the
government to account if that person works at pleasure and can be dismissed
without cause by the Prime Minister.
Director of the United States of America, Congressional Budget Office
In regard to appointment of the Director of the Congressional Budget
Office, under the US Congressional Budget and Impoundment Control Act 1974, the
Speaker of the House and the President pro tempore of the Senate jointly
appoint the Director on recommendation by the House and Senate Budget
Committees. The Director is appointed for a renewal term of four years and can
be removed by resolution from either Chamber.
Chief of the Korean National Assembly Budget Office
The Chief of the Korean National Assembly Budget Office (NABO) is
appointed by the Speaker with the consent of the House Steering Committee. The
House Steering Committee acts on advice from the ‘Recommendation of the Chief
of the National Assembly Budget Officer’ which comprises experts on the
workings of NABO, who are not officials of NABO. The Chief is appointed on an
ongoing basis with no fixed term, and ‘can be removed by the Speaker with
consent of the Steering Committee.’
Director of the Central Planning Bureau of The Netherlands
The CPB is managed by a board of directors comprising one Director and
two Deputy Directors who may be appointed, suspended and dismissed by the
Minister of Economic Affairs in consultation with seven other senior Ministers
whose portfolios are listed in the Act. The Director and the two deputies are
employed on an ongoing basis, with no set term of office.
Auditor-General for Australia
Under the Auditor-General Act 1997 (Cwlth), the Auditor-General
is appointed by the Governor-General, on recommendation by the relevant Minister.
The Minister is also required to refer the recommendation for appointment to
the Joint Committee of Public Accounts and Audit (JCPAA) for approval.
In addition, the appointment cannot be made unless the JCPAA has approved the
The Auditor-General’s term of office is for a period of ten years (non
renewable) and remuneration is determined by the Remuneration Tribunal or by
regulations if no determination of that remuneration by the Tribunal is in
The Auditor-General may resign from office through a signed notice to
the Governor-General. The Governor-General may remove the Auditor-General from
office on the grounds of misbehaviour or physical or mental incapacity on
request by the respective houses of Parliament in the same session. Additional
grounds for removal from office are based on actions that would inhibit the
Auditor-General’s independence of office such as becoming bankrupt.
New South Wales Parliamentary Budget Officer
The NSW Parliamentary Budget Officer is an independent officer of
the Parliament. The NSW Parliamentary Budget Officer is appointed for a term of
up to nine years, by the Presiding Officers on recommendation ‘by a panel consisting
of three senior independent public officials, the Ombudsman, the Information
Commissioner and the Chair of the Independent Pricing and Regulatory Tribunal.’ The NSW
Parliamentary Budget Officer ‘may only be removed from Office by the Presiding
Officers on the grounds of misbehaviour, incapacity or incompetence.‘
The situation has arisen in NSW where a Parliamentary Budget Officer has
not been appointed and there is no provision to make an interim appointment
under the Act. The Clerk of the NSW Legislative Assembly suggested that
provision could be made to avoid such a situation arising in the Federal
Oversight and accountability
Oversight of the PBO could be through a parliamentary committee, such as
the arrangement under the Auditor-General Act which enables the JCPAA to
consider the draft budget estimates of the ANAO and make recommendations on
The Auditor-General commented that audit reports are presented to the
Parliament which may be examined by the JCPAA through inquiry, to which the
Auditor-General provides evidence. In addition, the Auditor-General’s financial
statements are subject to annual scrutiny by an independent auditor.
DPS was of the view that the Presiding Officers should have oversight of
the PBO, but that during peak workload periods and in relation to
prioritisation issues, oversight could be undertaken by a parliamentary
committee, which would in turn provide advice to the Presiding Officers.
The Clerk of the Senate suggested that each House could nominate an
existing committee to supervise the operation of the office, similar to the
arrangements for the NSW PBO.
In NSW, the reporting requirements and line of accountability of the PBO
is contained in the Parliamentary Budget Officer Act. Under the Act, the Minister
may review the PBO after five years. Parliamentary oversight is undertaken by
two committees, one from each house of Parliament as nominated by the Presiding
Officers. The Clerk of the NSW Legislative Assembly suggested that review of
the Act could have also been undertaken by a joint parliamentary committee for
efficiency purposes and, designated by the Parliament to ensure the
independence of the PBO.
The Canadian Parliamentary Budget Officer reports to the Parliamentary
Librarian of Canada (who then reports to the Presiding Officers). In turn, the
Parliamentary Library is subject to oversight through the Standing Joint
Committee on the Library of Parliament.
The CBO is subject to ongoing review by two statutory budget committees.
In addition, the work of the CBO is assisted through review by two expert
panels, the economics panel and the health panel. The economics panel meets
biannually and comments and reviews CBO’s preliminary economic forecasts. The
economic panel comprises ‘eminent economists’, some of whom are previous CBO
directors, who serve a two-year term. The health panel meets periodically ‘to
examine frontier research in health policy and to advise the agency on its
analyses of health care issues. The health panel comprises ‘acknowledged
In regard to reporting requirements, public agencies including the
Auditor-General, must comply with the Financial Management and
Accountability Act 1997 (Cwlth), and the Commonwealth Authorities and
Companies Act 1997 (Cwlth). Such legislation would also be applied to the
Parliamentary Budget Officer and the PBO.
The Financial Management and Accountability Act applies to agencies that
are a financial part of the Commonwealth as a single legal entity. This
includes the parliamentary departments. The Financial
Management and Accountability Act sets the financial management framework for
agencies and requires production, auditing and reporting of annual financial
statements. The Commonwealth Authorities and Companies Act requires responsible
financial management and an annual report to be produced, and through the
relevant Minister, tabled in the Parliament. Further the Commonwealth
Authorities and Companies Act requires that an agency’s annual report must
include a financial report, director’s report and the auditor’s report.
Under the Parliamentary Service Act, the parliamentary departments are
required to produce an annual report for the Presiding Officers who are then
required to table these reports in the Parliament. In respect to the Departments
of the House of Representatives and the Senate, the JCPAA is required to
approve guidelines for the annual reports. There is no provision for this
process to occur for the DPS under the Parliamentary Service Act.
The operational review of the PBO was put forward as a monitoring
mechanism to ascertain whether the PBO was fulfilling its mandate and functions
and where improvements could be considered.
The operations of the Canadian PBO were reviewed by the Canadian
Parliament’s Joint Committee of the Library of Parliament after a period of 12
DPS stated ‘that the new body may need to be refined and improved’ which
could be achieved through an independent post-implementation review after a
period of three years.
Under the NSW Parliamentary Budget Officer Act, the Minister may review
the PBO after five years.
The committee was presented with a number of options in recommending the
type of authority of the Parliamentary Budget Officer should have and as a
result has broadened its consideration beyond the option suggested by the Agreement
for a Better Parliament – which states the Parliamentary Budget Office
(PBO) be based in the Parliamentary Library.
The majority of proponents for a PBO strongly supported establishing,
through dedicated legislation, the office of the Parliamentary Budget Officer
as an independent officer of the Parliament, similar to the Auditor-General.
Further, establishing the independence of the Parliamentary Budget Officer
and their PBO through legislation would provide for an indisputable clarity of
purpose and function for the PBO and establish the powers of the PBO in regard
to information collection and publishing of information. More broadly, this
approach would serve to strengthen the objectivity and credibility of the
office of Parliamentary Budget Officer, as well as enhance transparency of PBO operations.
Ensuring independence of office through dedicated legislation would
allow the Parliamentary Budget Officer to have control in setting the PBO’s
work program according to the allocated funding level and freedom in
contracting-in additional expertise, if required. This, in turn, would also
enable the Parliamentary Budget Officer to set the corporate direction of the
PBO in line with the establishing legislation and in consideration of the
financial scrutiny needs of the Parliament.
Providing for an independent Parliamentary Budget Officer would enable
the PBO to make public comments, where necessary, in regard to its findings and
recommendations. Importantly, this would enable the Parliamentary Budget
Officer and their PBO to establish a public profile, in line with the majority
of international PBOs which are also independent of Executive Government.
Access to information
It is clear to the committee that in order for the PBO to effectively
fulfil its mandate and provide the level of service outlined, it will need
special access to information and data held by Government departments.
Options considered by the committee included legislated powers to compel
information, such as the powers of the Auditor-General, legislated provisions
to request information, such as those of the NSW PBO, negotiated arrangements
with agencies, and the use of freedom of information laws.
The concerns raised about providing strong powers to direct the
production of information included the appropriateness of those powers for the
PBO and the potential that those powers may harm the relationships the PBO has
with Government agencies.
The committee considers that the PBO’s relationships with Government
agencies will be crucial to its success. Not only will the PBO require
information and data held by Government agencies, it may also need the
assistance of agencies in making the best use of that information and data.
Further, there may be instances where, by working together on the kinds
of information required, the agencies can better understand the ongoing needs
of the PBO. The relationships between the PBO and Government agencies might
also evolve over time, possibly leading to greater efficiencies and enhanced
products for Senators, Members and committees.
The committee is therefore of the view that the PBO should seek to
negotiate and develop memoranda of understanding (MOU) or similar instruments
(as their main formal mechanisms) with the Departments of the Treasury and of
Finance and possible other departments, to share information and data.
In the event that particular information is not provided to the PBO in
accordance with an MOU, and the PBO is not satisfied by the rationale of the
departments for declining to disclose information, the PBO should be entitled
to use the formal processes provided through the Freedom of Information Act
1982 (Cwlth), without cost.
Should the PBO then fail in its attempt to secure departmental
information through the Freedom of Information Act, it will have the further
option to report the matter to the Joint Committee of Public Accounts and Audit
(JCPAA), which may then choose to pursue the matter.
Access to information arrangements through a negotiated MOU and the practical
application of the MOU could be closely monitored by the PBO’s oversight
committee, possibly addressed in the annual report of the PBO and included
under the terms of reference for the evaluation of the PBO.
Confidentiality and disclosure of information and reports
Access to information is linked to the confidentiality provisions of the
PBO. In order to strengthen the trust between the PBO and the Government
agencies on which it relies to provide information, the PBO should keep
sensitive information provided by departments confidential within the PBO,
including withholding the release of that information to parliamentarians and
In negotiating an MOU with departments, it is expected that the PBO will
develop a framework for how certain information can be used appropriately. For
example, the PBO may use confidential information in the form of raw data as
part of its analysis, but publish only aggregate figures and results.
In dealing with specific requests for information held in confidence by
the PBO, the PBO should take into consideration relevant provisions of the MOU
through which the information was obtained, the Freedom of Information Act and
the Privacy Act.
The intent of this confidentiality framework is that:
all relevant departments should provide as much assistance as
possible for the PBO to effectively fulfil its mandate and perform its
functions in serving the Parliament
- the strict confidentiality arrangements applicable to the PBO
should encourage proactive information sharing from departments, and
- this framework seeks to provide a balanced starting point which
will be developed, reviewed and possibly revised over time.
The committee considers that wherever possible, in the interest of
transparency and accountability, the work of the PBO should be made publicly
In regard to publication of PBO reports and analysis outside the
caretaker period of general elections, where a client has specifically
requested confidentiality, the committee saw a need for work undertaken to
Further, PBO-initiated reports should be published and include the
underlying assumptions and information about any economic models used to
support the conclusions made.
Where possible, and by agreement with clients, the material used for
individual requests should be negotiated to be included in public reports of
the PBO, while retaining the confidentiality of the related original request.
This would have the advantage of providing flexibility and efficiency of
operations while maximising the public value of the work and enhancing
The Parliamentary Budget Officer should be empowered to make public
statements where they consider that the confidential or published material
his/her office has prepared has been misrepresented in the public domain.
Appointment, dismissal and remuneration arrangements
Transparency and accountability of the position of the Parliamentary
Budget Officer and the PBO could be ensured through the establishing
legislation in regard to the inclusion of provisions dealing with the
appointment, dismissal, term of office and remuneration of the Parliamentary
The committee believes the appointment, dismissal and remuneration arrangements
applied to the office of Auditor-General should as far as possible be applied
to the office of the Parliamentary Budget Officer. The committee is of the view
that the Auditor-General model for appointment, dismissal and remuneration has
been proven to work well in practice in the Australian context. Further this
model provides for parliamentary scrutiny of appointment through the Joint
Committee of Public Accounts and Audit, and dismissal by the Parliament on
grounds of misbehaviour or physical or mental incapacity.
The committee has also considered the application of the Auditor-General
model in relation to the involvement of the Executive Government in the
appointment and dismissal process for the Parliamentary Budget Officer and the
possible implications this has for independence of office. The committee
believes the Minister, through their department, has the expertise and
resources to make selections of appropriate candidates. In addition, with
parliamentary oversight for appointment provided by the JCPAA, and dismissal by
the Parliament as outlined, the committee is satisfied that independence of
office can be maintained.
In relation to the term of office for the Parliamentary Budget Officer,
the committee has recommended that it be renewable and for a period of four
years. The committee was of the view that the timeframe for the term of office include
a parliamentary cycle to enable greater ease of corporate planning. The term of
office as recommended by the committee is similar to that in place for the
Director of the Congressional Budget Office of the United States of America.
Oversight and accountability
The committee believes that because of the established oversight role of
the JCPAA over the operations of the Auditor-General, that it is an appropriate
committee to undertake, on the behalf of the Parliament, the oversight role of
the Parliamentary Budget Officer and their PBO.
In relation to reporting requirements, the committee understands the
Auditor-General and the parliamentary departments must comply with legislation
including the Financial Management and Accountability Act 1997 (Cwlth)
and Commonwealth Authorities and Companies Act 1997 (Cwlth). These acts require
agencies to be responsible in their financial management and produce an annual
report which includes audited financial statements to be tabled in the
Parliament. The committee understands that the operations of the Parliamentary
Budget Officer should also be subject to these legislative requirements. This
would require the Parliamentary Budget Officer, through the appropriate
mechanism to produce an annual report which includes its audited annual
financial statements, a report of activities undertaken during the financial
year and a Director’s report.
In regard to oversight of workload and negotiating work priorities, the
committee believes that the PBO should establish protocols which outline the
priorities of meeting client requests and have these protocols subject to
approval by the JCPAA.
In addition, the committee believes that it would be appropriate for the
Parliamentary Budget Officer to formulate his/her work program after
consultation with the JCPAA, other standing and statutory committees and
individual Members and Senators. But to retain independence of office, final
decision rights on the PBO’s work program should be fashioned similarly to that
which applies to the Auditor-General.
There were a number of proponents of evaluation of the PBO. The
committee believes that ongoing operational evaluation by an independent external
body is required to ensure that the PBO continues to meet its obligations under
its mandate and meet the changing needs of the Parliament.
In addition, evaluation of the PBO completed within nine months after an
election is held, should focus on the extent to which the PBO is meeting its
requirements under its establishing legislation, in line with the level of
funding it receives. Undertaking an operational evaluation of the PBO in the
specified period would allow sufficient time for the PBO to establish its
operational and reporting routine.
The committee believes there is a role for the JCPAA in ensuring that
there is parliamentary oversight in the process to engage an independent
organisation, to undertake the formal evaluation. This could be done by
requiring through legislation, that the Parliamentary Budget Officer consult
with the JCPAA in regard to the engagement of an independent organisation
undertaking the evaluation. The final evaluation report could then be tabled in
the Parliament and referred to the JCPAA for possible review.
The committee recommends that the position of Parliamentary
Budget Officer be established as an independent officer of the Parliament
through dedicated legislation.
The committee recommends that the legislation establishing
the Parliamentary Budget Officer include provisions to establish the
Parliamentary Budget Office to support the work of the Officer.
The committee recommends that the legislation establishing
the office of Parliamentary Budget Officer include the Officer’s: mandate,
functions, maintaining confidentiality of information provisions,
parliamentary oversight, reporting requirements, appointment, dismissal, remuneration
determination arrangements, and term of office.
The committee recommends that the Parliamentary Budget
Officer access information from Government departments through a negotiated
memorandum of understanding with the Departments of the Treasury and of
Finance and Deregulation and other departments or organisations as necessary.
The committee recommends that the Parliamentary Budget
Officer be empowered to use the formal processes provided through the Freedom
of Information Act 1982 (Cwlth) without cost to the Parliamentary Budget
Officer, in the event that particular information is not provided by a Government
department in accordance with any established memorandum of understanding,
and the PBO is not satisfied by the rationale of the department for declining
to disclose information.
The committee recommends that the legislation establishing
the office of Parliamentary Budget Officer include specific provisions to
maintain the confidentiality of the sensitive information held within the
Parliamentary Budget Office.
The committee recommends that wherever possible, in the
interest of transparency and accountability the work of the Parliamentary
Budget Office be made publicly available.
The committee recommends that responses by the Parliamentary
Budget Office to requests from individual parliamentarians, outside the
caretaker period for general elections, be provided in confidence, where it
has been specifically directed by the client to do so.
The committee recommends that where possible, the work that
has gone into the preparation of a response to a client request be made
available to be included in the public reports of the Parliamentary Budget
Officer. This may involve negotiating, with relevant Senators and Members for
the public release of work prepared on their behalf, while withholding
information about the original request, such as the identity of the
parliamentarian and other substantive information requested, to remain in
The committee recommends that the Parliamentary Budget
Officer be empowered to make public statements, in particular where they
consider that their work has been misrepresented in the public domain.
The committee recommends that the reporting provisions under
the establishing legislation require the Parliamentary Budget Officer to formulate
an annual work program, draft budget estimates and an annual report in line
with the Financial Management and Accountability Act 1997 (Cwlth) and
the Commonwealth Authorities and Companies Act 1997 (Cwlth).
The committee recommends that, with the exception of term of
office provisions, the appointment, dismissal and remuneration determination
processes of the Parliamentary Budget Officer be in line with similar
provisions contained in the Auditor-General Act 1997 (Cwlth).
The committee recommends that the term of office of the
Parliamentary Budget Officer be for a period of four years, with the option
of renewing the appointment.
The committee recommends that the Joint Committee of Public
Accounts and Audit (JCPAA) have oversight of the Parliamentary Budget Officer
and their office in regard to the annual work program, draft budget
estimates, and annual report, in line with similar provisions in the Auditor-General
Act 1997 (Cwlth). This includes a formal role for the JCPAA in endorsing
the workload protocols applicable to the Parliamentary Budget Office.
The committee recommends that an independent body be engaged
to undertake an operational evaluation of the Parliamentary Budget Office,
completed within nine months after the result of a Federal election is
notified. On completion, the evaluation report should be tabled in the
Parliament and referred to the Joint Committee of Public Accounts and Audit
for possible review.
The committee recommends that the proposal to engage an
independent body for the purpose of undertaking the operational evaluation of
the Parliamentary Budget Office be referred to the Joint Committee of Public
Accounts and Audit for consideration and endorsement.