Chapter 5 Resourcing and physical location
The Parliamentary Budget Officer and their staff will require extensive
knowledge, expertise and experience, particularly in the area of Government
finance and public policy, in order to undertake the assigned functions of providing
policy costings advice and analysis of budgetary related matters to the
In addition, the funding allocated for the operations of the
Parliamentary Budget Office (PBO) will need to be commensurate with the work
that it undertakes to ensure that the PBO meets the requirements outlined in
its mandate and so is deemed effective.
This chapter provides a broad outline of the staffing and funding
arrangements and associated issues such as employment provisions of staff,
which may apply to the PBO. The issues associated with the physical location of
the PBO are also discussed.
Staff qualifications, experience and associated issues
The Departments of the Treasury and of Finance and Deregulation
(Treasury and Finance) stated that the remuneration and level of the head of
the PBO ‘should be determined in [the] context of the mandate of the PBO and
Treasury and Finance further commented that there is a skill shortage of
the types of professionals that a PBO would generally employ. Treasury and
Finance advocated that PBO staff ‘will need to be highly qualified in areas
such as economics, Government finances and public policy.’
The Department of Parliamentary Services (DPS) was of a similar view in
relation to the experience and skill base of the Parliamentary Budget Officer
and PBO staff and stated:
In addition to being headed by an officer with outstanding
economic and financial credentials, the staff in the office will need to be
highly numerate and very well qualified in areas such as government finance,
economics and social policy. Staff will need high level communication skills
and be able to work flexibly to cope with the demands from clients. Senior
staff will need to be capable of providing clear and measured verbal advice to
Further, Treasury and Finance stated that it would take time to acquire
the right mix of in-house skills if the PBO were to undertake policy costing.
Treasury and Finance stated:
... should the mandate of the PBO include the costing of
policies, it will likely take some time to attract the right mix of in-house
skills and during the establishment phase, there may be a need to draw more heavily
on external consultants. While the PBO may be able to access financial
information and models from the Treasury and Finance, extensive professional
knowledge and experience will also be required to utilise and interpret the
DPS commented that ‘it is essential that pay rates be comparable to
those of officers of the Treasury and Finance, and the Productivity
The Auditor-General added:
The PBO would need to be staffed by people with specialist
skills and experience, and would require the flexibility to engage specialist
contractors as required and to second staff from other agencies on an agreed
Civil Liberties Australia (CLA) stated that PBO staff would need to be
well trained with a high level of technical skill and significant experience in
the budget process to provide the PBO with a reputation in producing quality of
product. CLA stated:
The PBO will require very high quality
staff, and plenty of them, so as to be able to earn a reputation in the first
decade for absolutely unimpeachable quality output. The PBO will need
well-trained people with a high level of technical skill, a somewhat academic
(although not too theoretical) bent, and senior staff leading with significant
experience of the budget process.
Further, CLA emphasised the importance of maintaining the neutrality of
PBO staff to ensure independent financial analysis and stated:
Non-partisanship – and the unfettered
ability to remain independent – is mandatory. It is a must because often the
way to analyse a budget proposal might be open to some debate, and you want the
methodological approach to be chosen on the basis of sound judgment, not
Staff employment framework
Two options were presented to the committee in relation to the
employment framework which would provide for the engagement of PBO staff. These
options were to either employ staff under the Public Service Act 1999 (Cwlth)
or the Parliamentary Service Act 1999 (Cwlth).
The Australian Public Service Act 1999 (Cwlth), the employment
framework for Government departments, provides that public servants be
responsive to the government and to work ‘within the framework of ministerial
responsibility to the Government, the Parliament and the Australian public’.
Whereas, the Parliamentary Service Act 1999 (Cwlth) requires staff of
parliamentary departments to ‘provide professional advice and support for the
Parliament independently of the Executive Government of the Commonwealth’.
While the Auditor-General is an independent officer of the Parliament,
the staff of the Australian National Audit Office (ANAO) are employed under the
Public Service Act 1999 (Cwlth). In regard to how this arrangement works
in practice, the Auditor-General stated:
... the staff of the Australian National Audit Office (ANAO)
and its predecessors have always been employed on the same terms and conditions
as the broader Australian Public Service (APS). This recognises that the ANAO
is an APS agency and the Auditor-General, while independent, is the Chief
Executive of the ANAO, and abides by the legislative and policy frameworks
applicable to an APS agency.
In addition, the ANAO’s enterprise agreement provides flexibility to set
the terms and conditions of employment for staff that have the relevant skills
and experience required. The Auditor-General qualified this approach and stated:
... if, however, I considered at any time that this situation
unduly impinged on my audit responsibilities, I would raise the matter with the
Government in the first instance.
The DPS stated that the ANAO, like the Productivity Commission,
ultimately serves the Government, and is accountable to the Parliament via a
Minister which could create perceptions of conflict.
The option of employing staff under the Parliamentary Service Act
1999 (Cwlth), was put forward by DPS and the Parliamentary Librarian in the
context of creating the PBO as a parliamentary agency alongside or within DPS.
The New South Wales (NSW) PBO legislation provides that staff are
employed as parliamentary officers. The Clerk of the NSW Legislative Assembly
Staff of the Parliamentary Budget Office are to be employed
by the Presiding Officers. While they are under the joint control of the Presiding
Officers, directions to such staff in relation to the exercise of the functions
of the Parliamentary Budget Officer can only be given by the Parliamentary
Budget Officer or another member of staff of the Parliamentary Budget Office
authorised by the Parliamentary Budget Officer.
The Organisation for Economic Co-operation and Development (OECD) stated
that PBOs should be given resources ‘commensurate with their mandate in order
for them to fulfil it in a credible manner.’ Further, in determining
a PBO’s budget, the OECD supported the same approach taken to determine the
budget of audit offices.
The Auditor-General did not comment on the level of funding that may be
required for a PBO, but stated that ‘it would be important that it receive
sufficient funding to be able to fulfil its mandate.’
This view was also shared by Treasury and Finance. Treasury and Finance
In order for the PBO to operate effectively, the resources
provided need to be aligned with its mandate. This is important in order for
the PBO to engage the appropriate staff and potentially consultants, and
develop the necessary expertise required to produce high quality output.
In addition, Treasury and Finance cautioned against duplication of its
functions by the PBO and stated:
In considering the mandate for the PBO and its resource
implications, consideration will need to be given to duplication of work. If
the PBO is provided with the same or similar functions to those of the Treasury
and Finance, two distinct streams of activity would be funded to provide
essentially the same product.
The Parliamentary Librarian commented that the PBO’s budget would need
to be significant for it to effectively perform its role. Further, underfunding
the PBO could become contentious as occurred in relation to the Canadian PBO
budget. The Parliamentary Librarian explained:
Without a significant budget the Parliamentary Budget Office
will be unable to effectively perform the role it is tasked to do. The initial
limited funding of the Canadian PBO has led to significant political debate,
aggrieved staff and aggrieved members of parliament.
The Parliamentary Librarian suggested funding the PBO to provide for:
- a head of office at a
very senior (suggest Senior Executive Service) level;
- senior research,
research and support staff (primarily senior research staff) and technical
specialists (note that the employee expenses will include 13% superannuation,
training and other employee costs);
- external services
commissioned to answer enquiries, including external specialists (based on the
experience with the pre-election policy service);
- publications and data
required to provide analysis;
- running costs and
consumables including support such as for personnel and finance systems.
DPS suggested taking into consideration the impact of the efficiency
dividends and the adverse impact this could have on the PBO’s services, that
the PBO’s budget could be jointly endorsed by representatives of the Parliament
and the Government. DPS stated:
The issue of efficiency dividends could have adverse
consequences for the ability of the PBO to provide high quality services in the
long-term. The Committee may wish to endorse a funding model where the budget
for the PBO is recommended by the longer-term Standing Committee (that
oversights the PBO) to the Presiding Officers and Government. This approach
would be unusual for the Australian public sector, but is an approach which is
utilised to set overall funding levels for the Canadian House of Commons and
the UK House of Commons.
The Clerk of the Senate stated that the resourcing requirements of the
PBO will likely have implications for the funding of parliamentary departments
and possibly lead to the reallocation of resources across the departments. This
could, in turn lead to reductions in the level of services provided to Senators
required for them to fulfil their constitutional functions. The Clerk of the
Senate urged the committee to reject this option.
The Clerk of the Senate also stated that even if the PBO was created as
a standalone, independent body, that pressure may still be placed on
prioritising funding bids by chamber departments. The Clerk of the Senate
Even if the office is to receive new funding, there could be
pressure to prioritise funding bids by the chamber departments and other
funding bids by DPS, leaving the Senate Department potentially disadvantaged.
The establishment of a PBO as a completely independent standalone body outside
the structure of the parliamentary departments would not alleviate this risk.
The Clerk of the House of Representatives advocated that the PBO should
be funded in its own right, separate from the funding provided to parliamentary
departments. The Clerk of the House of Representatives stated:
... we recognise that the Parliamentary Budget Office may
represent a significant increase in expenditure, at least in terms of the
funding of the parliamentary departments. As this is a new initiative that has
arisen from the various agreements for parliamentary reform, if it is proceeded
with it should be funded in its own right. It would be unfortunate if a request
for funding for a core function were to be questioned or rejected on the basis
that '$x million had been provided to Parliament to support the PBO, and here
they are asking for additional funds'.
The NSW PBO has been funded for $4 million which includes $1 million for
corporate set-up and $3 million annual recurrent funding. This amount provides
for 12 to 16 qualified and experienced economists, accountants and financial
DPS provided three estimates for the PBO’s budget. These were:
- Over $8 million per
annum to employ up to 30 staff and employment of external experts on demand.
The PBO could operate as a publications model, and provide major papers
commissioned by parliamentary committees, annual reports on the budget and
costs of specific policy proposals. This model does not include answering
questions from individual Members of Parliament.
- $8 million per annum
to employ up to 30 staff and employment of external experts on demand. The PBO
could undertake client requests and publications and have a significant
- $6 million per annum
to employ up to 20 staff and employment of external experts on demand. The PBO
could undertake client requests and publications, but with limited research
The Auditor-General suggested that organisational efficiencies and
budget savings could be gained by sharing the corporate support services of an
existing agency. This could be arranged through a memorandum of understanding between
the PBO and the relevant agency.
The Federal Coalition suggested the PBO should be physically located
within Parliament House.
The Parliamentary Librarian advised of the need for a close working
relationship between the PBO and Parliamentary Library and suggested
co-location of accommodation. The Parliamentary Librarian stated:
No matter what model is used, there will need to be a close
relationship between the Parliamentary Budget Office and Library for efficient
and effective services for members of parliament. Co-location of accommodation
and a close relationship between the management teams and staff is recommended.
DPS commented that office space is available in the basement area of
Parliament House and to make office space available in other areas would have
an associated fit-out cost. DPS stated:
We currently have people in the basement. I regard it as
non-acceptable, and that is why we are creating some better ground-level space
just beyond the staff dining room. It just is not acceptable. So our view is
that with the investment of some money we could create some further
above-ground office space. We would probably do that behind the recreation
area; there is another space there. Whether we put the PBO in there or put some
other people in there to create space closer to the library would be for
The Auditor-General commented that although office space at the ANAO had
recently been leased out, that it would still be possible for the PBO to be
located within its premises. The Auditor-General stated:
At the moment, we do not have any space; we have actually
rented out some of our building to other parties. Co-location, if it just meant
utilising space next door to us, would not be a problem at a conceptual level.
We have just contracted out the space for some years, but that could always be
Staff qualifications, experience and associated issues
The Parliamentary Budget Office (PBO) will need to be staffed by highly
qualified and experienced professionals with economic and financial analysis
skills, specific to Government finances and public policy.
Taking into consideration the current skills shortage in the field of
financial services, the committee acknowledges and agrees with evidence
received which advocates pay rates and employment levels for the Parliamentary
Budget Officer and their staff will need to be comparable to those in the Departments
of the Treasury and of Finance and Deregulation and the Productivity
Commission. In addition, the option to contract in additional expertise should
also be considered to supplement the knowledge base of the PBO as required.
In accordance with evidence received, the committee also acknowledges
that the staff of the PBO will need to maintain neutrality and exercise
judgement in their approach to the work they undertake to ensure the PBO’s
Staff employment framework
The committee considered the Public Service Act 1999 (Cwlth) and
the Parliamentary Service Act 1999 (Cwlth) as possible legislative
frameworks for the employment of staff within the PBO. The Public
Service Act is the legislative framework for employment within Government
departments, whereas the Parliamentary Service Act provides the legislative
framework for employment within parliamentary departments.
The Public Service Act has provided a workable framework for the Australian
National Audit Office (ANAO) in serving the Auditor-General, an independent
Officer of the Parliament. However, the committee notes that the mandate of the
PBO establishes a special role to provide responses to requests of individual
Senators and Members, which is a different role to that of the ANAO.
The Special Minister of State provides ministerial oversight of the
ANAO. A similar arrangement for the PBO may raise perceptions of inappropriate
relationships between Executive Government and the PBO. Further consideration
of the applicability of both the Public Service Act and the Parliamentary
Service Act for the engagement of employees of the PBO is warranted.
The committee acknowledges evidence which states that the funding level
of the PBO should be commensurate with the type of work that it will be
required to undertake. This will ensure that the PBO will be adequately
resourced and able to perform its functions effectively.
The Department of Parliamentary Services (DPS) has suggested three
funding options ranging from $6 to $8 million per annum. The committee makes
its determination on the level of funding for the PBO to be no less than $6
million per annum. This will allow for the engagement of a PBO with an
estimated staffing level of between 12 to 15 staff with the requisite skills,
knowledge and experience. The committee makes it determination of possible
staffing numbers based on the estimates provided in the body of the Chapter and
understands it will be the responsibility of the Parliamentary Budget Officer
to determine staffing numbers in line with allocated funding.
The committee does not believe there is a substantial advantage in
locating the PBO within Parliament House. Given the current space and cost
limitations to creating additional office accommodation within Parliament
House, the committee believes the PBO would be best placed outside of
Parliament House, but within close proximity to Parliament House, with the
possibility of co-locating with another, established organisation.
The committee recommends that the Office of the Parliamentary
Budget Officer be provided with ongoing funding of no less than $6 million
per annum with consideration being given to additional resourcing for
The committee recommends that the annual draft budget of the
Office of the Parliamentary Budget Officer be considered by the Joint
Committee of Public Accounts and Audit, and that this committee explicitly
review the adequacy of additional funding provided for election years.
The committee recommends that the Australian Government
explore locating the Parliamentary Budget Office within close proximity to
Parliament House or co-locating it with an established organisation for the
purpose of gaining administrative efficiencies.
Senator the Hon
16 March 2011