NEWSFLASH! In October I will join The Conversation as its Business and Economy Editor. I have been honoured to work at The Age for the past ten years, originally alongside Tim Colebatch, and for the past four years as its economics editor.

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Tuesday, June 02, 2015

The Parliamentary Budget Office is corrupting rather helping political debate

What happened on Q&A last week was just the tip of the iceberg. And I am not talking about tampons. I'm talking about real ambushes, the kind that are genuinely unfair.

Joe Hockey was asked to respond to modelling that said his budget would cost some families $21,000 over four years.

"Well, hang on. I haven't seen this modelling," he replied. Most of Australia hadn't. Bill Shorten's office had released results from the work it had commissioned from the National Centre for Social and Economic Modelling without releasing the work itself.

"You're asking me about something I haven't seen, the government hasn't seen and most of the media haven't seen," Hockey quite rightly pleaded. "I don't know what the assumptions were ... I have seen lots of economic modelling. What you put in and what comes out, you don't want to see. I want to see what's going into this sausage machine."

His point wasn't that there was anything wrong with the centre's modelling (as far as he knew), it was that without knowing which measures it had included, which measures it had excluded and what it had assumed about wages and so on, he was being asked to wrestle with a column of smoke.

And not only Hockey. The previous day Labor had asked journalists to report on what it said were the centre's findings, without showing them its report. They could ask questions of the centre, but weren't allowed to see what it had written.

Perfectly timed for the start of the parliamentary week, Labor's tactics gave it a weapon to use against the government while depriving the government of a weapon to use against it. That it later relented and released the report doesn't excuse its behaviour.

It's not the first time. In April, Labor announced a new policy on superannuation that it said had been "costed by the Parliamentary Budget Office" as saving $14.3 billion over 10 years. But it wouldn't release the costing. How the office arrived at it, or even if it had, was a matter of conjecture...

The Parliamentary Budget Office costs us $7 million a year. It employs 35 people. It was set up to give us confidence that the promises made by our politicians would cost what they said they would cost. But the rules governing it allow politicians to hang on to its work, even while they are quoting it, misrepresenting a cost that may have been arrived at by one means as if it had been arrived at by another.

Every costing concluded by the PBO is given a reliability rating ranging from "low" to "highly reliable". But Labor won't say what rating the costing of its super policy got or how the costing was arrived at. When asked, it says that the Coalition didn't release the costings it commissioned during the 2013 election. 

And it's right. The Coalition released 80 or so policies during the campaign, almost all of them costed by the PBO and to the best of my knowledge none of them publicly released.

At times the charade was farcical. The Coalition claimed that cutting the public service workforce by 12,000 would save $5.2 billion. It said the PBO had said so. But how was the figure arrived at? Which financial year did the savings start from? Did they include the savings on rent? Did they include superannuation savings? So heavy was the pressure on the Coalition to answer the question, and so keen was the Coalition to deny Labor the opportunity of seeing what its numbers meant, that it resorted to showing the document to selected journalists on the proviso that they could look at it for a few minutes, take only a few notes, and take no photos before it was whisked away.

Then at the death knell, on the Thursday before the poll, it released a few pages of numbers. No details, no clues as to how the numbers were arrived at.

Instead of allowing us to understand what our politicians had been promising us, our investment in the Parliamentary Budget Office allowed them to treat us like mugs.

After the election the full costings were published in accordance with a rule that requires the PBO to give a full accounting within 30 days. We did get to see them, but too late.

It can easily be fixed. And it's in the Coalition's interest to fix it so that Labor doesn't do next time what it did last time.

The rules should be changed to require the PBO to release a costing document as soon as the party that commissions it quotes it. Until then, it should be completely confidential. The PBO should also be able to continue to do confidential work for politicians right up until polling day, something it cannot do at the moment once the election is under way.

It's not only the Coalition that should listen. It's also Labor in Victoria. It is about to set up Victoria's Parliamentary Budget Office. It's too important to get wrong.

In The Age and Sydney Morning Herald