Thursday, November 24, 2011

The Parliamentary Budget office springs to life, crippled

I wanted it to be able to provide confidential costings during the election campaign.

It won't now. And Hockey says he won't use it.

Here's what I wrote last month when there was time to put things right:

"It is in all of our interests to give oppositions access to the same high quality costing process as governments. The access has to be confidential. Developing a policy is an iterative process. Ideally an opposition or a government comes up with idea, sketches it out, perhaps get surprised at how much it costs (or doesn’t cost) fine tunes it, sends it back for another costing and so on until the polciy and costing are final.

The new Parliamentary Budget Office will enable oppositions to do that. For the first time oppositions will be able to put up ideas to an official costing organisation in confidence and keep coming back until they get it right.

Except that they won’t, once the campaign starts. Unhelpfully, the provisions of the government’s bill remove confidentiality with the issue of writs. After the campaign starts (exactly the time oppositions might need to fine tune their policies) consultation becomes a one-shot game. An opposition can submit a policy to the PBO, but it won’t know what the PBO makes of it until just before the finding is published on the PBO website.

No opposition will take that risk, at least about something risky. Joe Hockey has already said he won’t use the process. Nor should he. it is loaded against the opposition.

It can easily be fixed. All that’s needed is an amendment that would allow confidential consultations during the campaign as well as during the rest of the year. It’d be in Labor’s interest as well as the Coalition’s. It’ll be in opposition soon enough. Swan, Hockey or whoever occupies the shadow treasurer’s chair could iterate with the PBO as much as they want until they get the policy right, knowing the PBO would release only the final costing and not embarrass them.

Hockey moved an amendment to that effect in the House of Representatives. It was defeated. But all is not lost. The Greens are prepared to save the day and negotiate on confidentiality in the Senate. Their only condition is that all parties putting themselves up for office be required to release official costings of all of policies worth more than $100 million, also a good idea.

There’s a chance sense will prevail. We have a rare opportunity to get things right, to set up a system that will work for both sides of politics forever. Labor shows every sign of shooting itself in the foot. I’m not confident Hockey won’t either. But we’re close, very close."

The government said "no" after circulating a minute from the Secretaries of Treasury and Finance coming up with three reasons why not.

It's below.

Reason 1 is doing so would be inconsistent with the Charter of Budget Honesty arrangements. Err.. The reason for the PBO is that the Charter of Budget honesty arrangements are not working. The whole point of having the new office is that it will do things differently. By definition it will be inconsistent.

Reason 2, about game playing, is a tenuous possibility. But there can be safeguards. It would be easy for a clever PBO to check announced policies, and if party A asked the PBO to cost announced policies from party B, the PBO could just say no, or at least "not unless party B asks me to".

Reason 3, about resourcing is something of an excuse. A temporary spike in workload would be easy to manage through secondments and hiring consultants.

It's done now. The PBO is alive, but a little broken.

Pbo Executive Minute

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