As the Government goes through the process of pulling the Budget together, priorities are weighed up and rigorous costings are applied to ensure we’re are open and accountable to the community that elected us.
This transparency on costings is critical for people to make up their minds about policies and the benefits to the public of pursuing them.
It’s long been accepted that Australian companies must keep their books in good order or face the risk of being exposed by an end-of-year audit.
If we are right to demand this of private companies on behalf of their shareholders and lenders, then we are most certainly right to apply this standard to political parties on behalf of taxpayers.
I’m a firm believer that transparency on costings should apply to both governments and those who seek to govern, so the community has the proper opportunity to scrutinise and assess policies and their impact on the budget.
That’s why the Gillard Government established the Parliamentary Budget Office (PBO) to ensure budget transparency from all sides of politics.
Members of Parliament can submit a request to the PBO to have their policies costed at any time. During an election campaign, political parties can have their commitments officially costed by the PBO or the Departments of Treasury and Finance and Deregulation.
However, this is not currently mandatory, and there is no legislated mechanism for all the commitments of all the political parties to be compiled and assessed in a consistent manner.
It relies on the goodwill and honesty of political parties to submit their policies for costing in good time so that they can be released for the public to see. Unfortunately, history shows that cheap politics can often win out over goodwill - there have been too many instances where costings have been either deliberately misused or compiled with a total disregard for basic accounting standards.
No one will ever forget Treasury unearthing an $11 billion hole in the Coalition costings weeks after the 2010 campaign, and subsequently, when their auditors were found guilty of professional misconduct.
The legislation I’m introducing into Parliament today will improve the PBO’s capacity to ensure budget transparency from all sides of politics. Under these changes, the PBO will publish a report with policy costings of the full suite of a party’s election commitments. The report will detail full costings of political parties election commitments and their budget bottom line 30 days after an election.
This means that even if a party does not take advantage of the costing options available under the PBO’s legislation, or under the Charter of Budget Honesty, the rigour of an independent analysis will still be brought to bear on that party’s policies.
Through these reforms, business and the wider community will have more information about alternative approaches to fiscal policy, and there will be a more informed and accurate debate on economic policy in this country.
Of course, in compiling the post-election report, the PBO might also seek further information from political parties themselves, and from any third parties involved in preparing the parties’ costings.
This means that if a political party tries to avoid proper scrutiny by using a private accountant without budget expertise, all of this information can still be obtained by the PBO. Ultimately, these reforms will remove the capacity of any political party to try to mislead the Australian people over costings and punish those that do.
It will help to ensure that all political parties are straight with the Australian people before the election - because they will be caught out afterwards if they are not. At the end of the day, those who have nothing to hide have nothing to fear.