Parliamentary Budget Officer's Review
The establishment of the Parliamentary Budget Office (PBO) represents possibly the most significant institutional initiative to enhance the Commonwealth’s fiscal management framework since the introduction of the Charter of Budget Honesty in 1998.
The Australian Parliament now has an independent and non-partisan institution that it can call on to provide analysis of the budget, fiscal policy and the financial implications of policy proposals.
Commencing on 23 July 2012, the PBO was faced with two related but competing priorities, namely to accept requests from parliamentarians as quickly as possible, and to put in place the necessary capability to enable the PBO to respond effectively to such requests.
The PBO moved quickly to engage with key parliamentary stakeholders, recruit appropriately qualified and experienced staff, and build its financial modelling and costing capabilities. Particular thanks are due to the Treasury and the former Department of Finance and Deregulation (Finance) for their generosity in releasing a number of high-quality staff on secondment to the PBO pending the recruitment of its own permanent staff.
A conscious decision was taken to start accepting requests for work from early September 2012, less than two months after the PBO opened its doors. This decision was taken on the basis that, while the PBO was far from fully staffed at that point in time, the best way to learn a job is to do the job. The forbearance and understanding of our stakeholders, who in the early days sometimes had to wait considerable periods of time to receive their responses, are appreciated.
Over the course of its initial year of operations, the PBO developed into a fully functioning institution with 33 staff as at 30 June 2013. The PBO was well placed to respond to the heavy workload it faced in the lead-up to the 2013 general election.
Access to information in a timely fashion is vital for the PBO to be able to prepare high-quality responses to requests from parliamentarians within reasonable timeframes. To this end the PBO engaged extensively with government agencies to put in place arrangements for the provision of information to the PBO.
By and large these arrangements have worked well and the PBO is grateful for the cooperation it has received from agencies. The PBO acknowledges that its requests for information have placed a substantial additional workload on many government agencies. To 30 June 2013, the PBO had made 360 requests of agencies and received 331 responses. Most responses were received in a timely manner. In only a limited number of instances have extended delays in receiving responses from agencies affected the PBO’s ability to respond to requests from parliamentarians in a timely fashion.
As flagged in the PBO’s work plan for 2012–13, in its first year the PBO had to allocate most of its resources to responding to requests for policy costings and budget information. To 30 June 2013, the PBO had received 607 requests for work (net of withdrawn requests) and prepared 461 responses. This workload reflected a pent-up demand for the PBO’s services, in particular from non-government parliamentary parties. The level of demand was heightened by the impending 2013 general election.
Experience to date suggests that the PBO has already had a significant impact in helping to level the playing field for non-government parties and independent parliamentarians. It has done so by helping to redress the asymmetry of access to costing and budget information services that existed prior to the establishment of the PBO. Now non-government parties and independent parliamentarians have access to similar costing and budget information services from the PBO that government parties have always had available to them from government agencies.
The PBO often engages with parliamentary parties and independent parliamentarians on an iterative basis as they refine their policy options. This process can be expected to result in more robust policy development with greater financial rigour. Over time, this involvement by the PBO will be likely to help sharpen the focus of public debate on substantive policy issues rather than on the accuracy of the policy costings.
The PBO was able to devote resources to publish one report in 2012–13 under its self-initiated program of research and analysis of the budget and fiscal policy settings. Following the May 2013 Budget, the report, Estimates of the structural budget balance of the Australian Government: 2001–02 to 2016–17, was released. After the work associated with the 2013 general election has been completed, the PBO expects to allocate significantly more resources to its self-initiated work program, which has a focus on budget sustainability and transparency.
On several occasions throughout the year the PBO met with the Joint Committee of Public Accounts and Audit (JCPAA). Topics for discussion included the PBO’s 2012–13 work plan and 2013–14 budget estimates, and its enhanced mandate to prepare a post-election report on the budgetary implications of the election commitments of parliamentary parties. The JCPAA provided valuable support to the PBO during its establishment phase. The PBO looks forward to a productive ongoing relationship with the JCPAA.
The PBO appeared before the Senate Finance and Public Administration Legislation Committee at its hearings in October 2012 and February 2013. The PBO has commenced providing the committee with a report on performance statistics in advance of each committee hearing and intends to continue this practice.
Over the course of the year I met on a regular basis with the Presiding Officers. They provided wise counsel and strong support for the independence and non-partisan character of the Parliamentary Budget Officer’s role.
Finally, it is important to acknowledge the efforts of the PBO’s highly proficient, hardworking and dedicated staff. Their contribution has been vital to the success of the PBO in its inaugural year.
Download the full report above.